House of Representatives
1 September 1955

21st Parliament · 1st Session

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The Clerk:

– In the unavoidable absence of Mr. Speaker (Hon. Archie Cameron), the Chairman of Committees will, under Standing Order 13, take the chair as Deputy Speaker.

Mr. Deputy Speaker. (Mr. C. F. Adermann) thereupon took the chair at 10.30 a.m., and read prayers.

Prime Minister · KOOYONG, VICTORIA · LP

– Before dealing with the business on the notice-paper, I think that honorable members would be glad if you, Mr. Deputy Speaker, would convey to Mr. Speaker their sympathy in his illness.


– I shall be happy to comply with that suggestion.

Honorable Members. - Hear, hear !

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– Yesterday, the Minister for External Affairs answered a question, asked by the honorable member for Robertson, concerning the current visit of Asian journalists’ to this country. 1 also desired to ask a question on that subject but you, Mr. Deputy Speaker, did not see me. In the Minister’s reply to the honorable member for Robertson he indicated that arrangements had been made for the journalists to see a number of places in this country, and to meet the leaders of industry, but he did not indicate whether arrangements had been made for them to meet the leaders of the trade union movement in Australia. I now ask the right honorable gentleman if arrangements have been made for them to do so. If the matter has been overlooked, will the Minister endeavour to make arrangements for these journalists to meet the leaders of the trade union movement in this country?

Minister for External Affairs · LP

– I appreciate the honorable member’s proposal, but, unfortunately, the time that these journalists from Asia will have in Australia is limited by their own affairs. They will be here for only about three weeks. Although I have no precise information regarding their itinerary in my mind, I expect that their programme has been arranged. In ft.- [11] my reply yesterday to the honorable member for Robertson I was able to make only a short statement. If arrangements have not been made for these Asian journalists to meet the leaders of the trade union movement in Australia, I shall do my best to see that such a meeting is included in their programme. It will be advisable to have such a meeting so that they may get a balanced view of Australian conditions.

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– Does the Minister for Immigration recall the distressing circumstances of the widow and family of a Dutch immigrant who lost his life in a recent attempt to rescue a child in a suburb of Melbourne? If so, can he inform the House whether his department has done anything, or can do anything, to help them?

Minister for Immigration · HIGGINS, VICTORIA · LP

– I am certain that the sympathy of all members of the House will go to the widow and family of the brave man who lost his life in trying to rescue a child from drowning. Immediately the facts came to my notice, I made arrangements for a social worker from the department to contact the mother of the family. My colleague, the Minister for Social Services, has also taken suitable action through bis department. Owing to the fact that Mrs. van der Kruys does not normally become eligible for a widow’s pension until she has become naturalized- and that cannot be done until next year - arrangements have been made for a special allowance to be made to her in the meantime. I understand, also, that the Victorian Government is arranging, through the appropriate departments, to take helpful action in the matter. It will gladden the hearts of all honorable members to know that there has been such a warm-hearted response in Victoria to the story of this family. I read yesterday that an appeal launched by one of the newspapers had already raised more than £3,000. The response impressed me as being tangible evidence of the good-neighbour spirit in action and something typical of the spirit of mateship on which we in this country pride ourselves.

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– I address a question to the Prime Minister. I desire to know whether it is a fact that functions associated with the opening of a new steel mill at Port Kembla by the Broken Hill Proprietary Company Limited on Tuesday last were on a most lavish scale. Is the right honorable gentleman able to state how many of the workers responsible for the construction of the mill, together with their families, participated in the banquet which I understand was the highlight of the festivities? Is it a fact that the company had set aside an amount of £100,000 to meet the costs involved? Does the Prime Minister consider that expenditure on such a scale and for such a purpose is warranted? Finally, is the expenditure involved an allowable deduction for taxation purposes?


– I am not in the secret, so I cannot tell the honorable member how much the functions cost. No doubt, I cost the company my fair share. So also did the Premier of New South “Wales and other well-known political personalities who attended. So far from the people who worked so magnificently in the construction of this enterprise being excluded, a great number of the more senior employees attended the function at which T was present, and I was informed that the company proposed shortly afterwards - I think on the following day, but I am not sure - to hold an even larger function for its employees, at which it was expected that something like S,000 people would attend.

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– I direct a question to the Postmaster-General. Is the Minister aware that the broadcast of programmes from station 3LO, Melbourne, is subject to fading and distortion? As symphony concerts and, even more important to some people, broadcasts from this Parliament are transmitted to Tasmania through station 3LO, will the Minister investigate the possibility of increasing the power of station 3LO, or, more particularly, of establishing a new regional station to re-broadcast these programmes in Tasmania?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Consideration of increased power for national broadcasting stations is very well advanced. It is proposed - and I think the work has actually been done in certain instances - to increase the power very considerably for the reasons mentioned by the honorable member.

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– I address a question to the Minister for the Navy. Is it a service rule that salutes must be acknowledged by all officers? If so, is the Minister bound by this rule ? If he is bound by it, why does not he always observe it?

Minister for the Army · MORETON, QUEENSLAND · LP

– The question is completely facetious and requires no answer.

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– I direct a question to the Minister for Civil Aviation. The Minister recently announced that distance measuring equipment was being installed at airports on the main air routes throughout Australia. Can he now inform the House of the stage that has been reached in the installation of this important equipment? Have all airline operators now installed the ancillary equipment in passenger aircraft operating between capital cities and certain other major airports, and is it to be installed also in freight-carrying aircraft? Is it a fact that Australia is one of the first countries to ensure that this important safety equipment is installed and use compulsorily under civil aviation regulations ?

Minister for Air · DENISON, TASMANIA · LP

– I think it is true that Australia was the first nation to make mandatory the installation on its airlines of distance measuring equipment. The reason may have been that the Australian equipment is undoubtedly better than that made anywhere else in the world. Honorable members may recall that there was some argument between the United States and the United Kingdom over the frequencies to be used. The United States advocated 1,000 megacycles and the United Kingdom 200 megacycles. Australia used the 200 megacycle frequency and .the double pulse.

The United Kingdom used the single pulse. The Australian equipment has proved exceptionally good. It is one of the finest navigational aids which has been introduced in commercial aviation for many years. The programme calls for 77 of these stations in Australia. When I last inquired, 36 were operating, 19 were ready to operate or awaiting flight testing, and the remaining 22 were in various stages of construction. The building programme was being maintained and it was expected that the work would finish next March. Almost every aircraft, whether passenger or freight, has now been fitted with distance measuring equipment. One or two have yet to be fitted. We do not take the ‘planes off the airlines and make the companies install the equipment. It is installed when they are undergoing ordinary routine maintenance.

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– In view of the strong objections raised at a recent conference of the Farmers and Settlers Association to the relaxation of the ban on the export of merino rams or semen for experimental purposes, will the Minister for Commerce and Agriculture give honorable members an assurance that the wishes of the great bulk of Australian wool men will be strictly adhered to, and that action will be taken to prevent any challenge in years to come to Australia’s greatest industry and therefore to the future prosperity of this country?

Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– The great woolgrowing organizations of Australia understand perfectly clearly that I have no intention of relaxing the ban on the export of merino stud sheep for commercial purposes, unless there is an overwhelming expression of the wool industry’s approval of such action. That is the only way in which it will be done. A handful of sheep - perhaps a dozen - have gone for scientific purposes to those countries that have contributed their knowledge to us, with invaluable results. I think four sheep have gone to the University of California, in the United States of America, four to the United Kingdom, and four to South Africa. They have been sent there for scientific and completely non-commercial purposes.

Absolutely unequivocal guarantees have been given by the Governments of the United Kingdom and South Africa, and by the University of California, that neither the sheep nor their progeny or semen will be made available in any circumstances for commercial purposes.

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– Has the Minister for Commerce and Agriculture any information on the reported plan of the Western Australian Government to rehabilitate the dairying industry in that State? I understand that the State Government will approach the Commonwealth Government to help to finance this plan, under which settlers will be financed to obtain 160 acres of pasture, and. that it is anticipated that the Commonwealth Government will assist to the extent of meeting half the cost, plus three-fifths of any losses involved in the rehabilitation.


– My only information on this matter comes from a news item that I have seen in the last 24 hours, and from the question of the honorable member. I gather that the Government of Western Australia has accepted as correct the finding of the Bureau of Agricultural Economics that there is in that State a widespread problem arising from the fact that men have been settled by earlier governments on land which has been insufficient to enable them to milk sufficient cows to make a living. The solution is quite obvious. By some means or other those farmers must be enabled to run a commercial herd of cows. Apparently, the Western Australian Government now recognizes that fact, but there is no merit in the suggestion that this or any other problem can be solved by the Australian Government or some one else putting up the money.

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Ma: JOHNSON.- Can the Prime

Minister inform the House when the report of the Tariff Board dealing with asbestos production at Wittenoom Gorge in Western Australia will be tabled? I remind the Prime Minister that a promise was made that this report would be tabled during the last session. It is common knowledge that the position is growing more and more desperate at Wittenoom Gorge, and more Commonwealth assistance is needed if this substantial industry, which supports a population of 800 persons in the town, is to continue.


-I appreciate the interest that the honorable member has in Ibis matter, but I cannot answer his question offhand. I will ascertain the position from my colleague, the Minister for Trade and Customs, and I will advise the honorable member at the earliest possible moment.

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– In view of the high cost of imported tea, can the Minister for Commerce and Agriculture say whether, as a result of recent experiments, there is any prospect of establishing a payable tea-growing industry in North Queensland?


– Sufficient work has bc-en done over a period of years to establish beyond doubt that there are wide areas in Queensland where the soil and climatic conditions are suitable for the growing of tea. The unresolved problem relates to the economic harvesting of the leaf. Considerable work has been done in experimenting with, and attempting to develop, mechanical harvesters of leaf, which would enable the industry to stand on its own economic feet, but I regret to say that not sufficient progress has yet been made to bring such a position within sight. The basic conditions for the establishment of a tea-growing industry do exist, and I hope that the Government of Queensland, in conjunction with private individuals and companies, and with whatever aid can be obtained from technical people in the service of the Australian Government, will continue its attempts to establish the industry.

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– I ask the Prime Minister why, in the face of an acute shortage of dollars in the Australian economy, there has been during the past twelve months an increase of over 2,000,000 dollars in the allocation of this currency for the purchase of newsprint from dollar sources.

Is there any special reason why newspaper proprietors should receive preferential treatment when this country vitally needs dollars for the importation of machinery needed for expansion ?


– I do not administer this matter, but I shall obtain answers to the question and let the honorable member have them next week.

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– Supplementary to the question asked by the honorable member for Darling Downs, I ask the Minister for Civil Aviation whether it is true that the useful and important air navigation aid known as D.M.E. is an Australian invention and was, in fact, developed by the Commonwealth Scientific and Industrial Research Organization.


– Yes, that is true. Dr. Bowen, of the Commonwealth Scientific and Industrial Research Organization was, I think, the leading scientist, and he was associated very closely with Mr. Medley of the Department of Civil Aviation; but I think it was a joint effort of the scientists of the Department of Civil Aviation and the Commonwealth Scientific and Industrial Research Organization. Unquestionably, the D.M.E. itself is an Australian invention, although, as the honorable member will know very well, it is an adaptation of certain equipment which was used during the war for bombing purposes.

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– Can the Prime Minister advise me when he intends setting up a joint parliamentary committee to consider changes in the Australian Constitution? In view of the many failures to secure approval of constitutional alterations, will the Prime Minister consider the advisability of submitting proposals - if not all, then some of them - to become effective four or five years after they have been approved by the people? The right honorable gentleman will appreciate that this would take such matters completely outside the realm of party politics, and enable the proposals to be put to the people devoid of hostilities, so that no political party would secure an advantage over other parties.


– I am not entirely clear concerning the significance of the proposal, but I shall have a look at it and give it consideration before the committee is set up.

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– In view of uncertainty which exists in Victoria, and possibly also in other States, concerning the eligibility for long service leave of people working under conditions governed by federal awards, is the Minister for Labour and National Service in a position to clarify the matter?


– The Victorian State Long Service Leave Act of 1953 provides that, every worker shall be entitled to long service leave in respect of continuous employment with one and the same employer. It was at first thought that this legislation did not apply to any one working under federal awards, but this view was challenged in the High Court in the case of a worker under the federal metal trades award, and the High Court has recently held in that case- the case of Collins v. Charles Marshall Proprietary Limited - that the worker was entitled to long service leave. There are, however, some technicalities, including some constitutional questions, involved, and I cannot say that the High Court decision means that every employee working under a federal, award in Victoria is entitled to long service leave. Each federal award and its history and other circumstances will have to be examined.

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– Following the recent inspection by the Minister for the Army of the former services training camp and immigrant holding centre at Mildura, will he give early consideration to making full use of this splendid camp for the housing and training of army personnel and national service trainees in a congenial, decentralized area?


– I appreciate the continued interest that the honorable gentleman has shown in the immigrant camp at Mildura. The Army uses only a small portion of this camp by permissive occupation from the Department of Immigration. I agree with the honorable gentleman’s opinion that it is a splendid camp. The Army began to use the camp only in 1951, after National Service training facilities had been established permanently at Puckapunyal. I shall keep constantly under review any variation in Army activities, which are not static, and if they are extended I shall consider using further portions of the Mildura camp, subject to the approval of the Minister for Immigration.

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– My question is directed, on this first day of spring, to the Minister for the Interior. “Will he arrange, as early as possible after the present school vacation,, for an opportunity to be given to members of the Parliament to visit the new infants’ school in the suburb of Griffith, Canberra, and possibly some of the other new schools established here, so that they may assess the excellent work that is being done by this Government, and the department under the Minister’s control, in the provision of buildings and facilities for the education of children?

Minister for the Interior · CHISHOLM, VICTORIA · LP

– Facilities are always available to any honorable member who wishes at any time to see what is happening in Canberra by way of development. If the honorable member desires me or the department to arrange organized parties to visit certain specific places, I shall be very pleased to do so. Unintentionally, I arranged an organized party recently by giving a certain committee a job to do during which the members of the committee made a tour of inspection of Canberra, and I was rather surprised to find that some of them had never before been on the top of Red Hill. However, I shall be very pleased to make these facilities available. I should like to mention one other matter. Recently, a well-known world-wide expert on pre-school centres visited Canberra, and I was informed that after this visitor had inspected the Canberra pre-school centres she said that there was nothing better in the world, and, in fact, they were ahead of any similar establishments she had seen in any other part of the world.

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– My question is directed to the Minister for Immigration. Does the presence in Australia of the vice-chairman of the Migration Council, London, and another gentleman who is a prominent member of that council, indicate any change in the basis of immigration to Australia from the United Kingdom ?


– The gentlemen to whom the honorable member has referred are representatives of the Migration Council, which is an unofficial body in the United Kingdom, composed of a number of public-spirited citizens who are urging a wider decentralization of population and industrial activity from the United Kingdom to the various Commonwealth countries. I have been pleased to receive one of them, Sir Clifford Heathcote-Smith, who is in Australia at the present time, and to hear his views. I understand that, accompanied by a colleague, he will have some further discussion with us, but I emphasize that, while we welcome the interest of these gentlemen in problems with which we ourselves are so deeply concerned, they are from an unofficial body, and official discussions of the character which normally take place between governments will follow when the Earl of Home, who is the Minister for Commonwealth Relations directly concerned with migration matters, visits Australia a little later in the year.

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– I direct the attention of the Minister for Air to the fact that it has been demonstrated recently that aircraft can take off without the assistance of a pilot, and, if provided with fuel, can continue to fly without air crew assistance to the danger of those residing in or visiting the area over which they are flying, in spite of precautions by the Royal Australian Air Force. As au inquiry is being held into this matter, -.vill the Minister, instead of enlisting the services of Navy aircraft, favorably consider seeking the advice and, if necessary, obtaining the personal assistance of his colleague, the Minister for External Affairs, in bringing such unauthorized flights to an end ? I remind the Minister for Air that the Minister for External Affairs, who is to go overseas shortly, has had recent practice in such activities, and is reputed to be an expert at putting ar end to flights made without the assistance of a pilot. I make the suggestion with the object of preserving the life and wellbeing of those who are not interested in involuntary aviation.


– It is true that aircraft can take off and fly without pilot: these days. That is just one indication of how things have improved since the honorable member for Maribyrnong wa? Minister for Civil Aviation.

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BUDGET 1955-56

hi Committee of Supply: Consideration resumed from the 31st August (vid.e page 251), on motion by Sir Arthur


That the first item in the Estimates under Division No. 1 - the Senate - namely “ Salaries and Allowances, £27,700 be agreed to.

Upon which Dr. Evatt had moved by way of amendment -

That the first item be reduced by £1.


.- From my study of the budget speech delivered, by the Treasurer (Sir Arthur Fadden), there appears to be very little left for the remaining speakers in this debate to discuss. The Leader of the Opposition (Dr. Evatt) has given adequate answers to the very few intelligent statements made by the Treasurer during the debate. The budget is negative, unreal and futile. The Treasurer appears to have dubbed it a holding budget. 7 agree with him, but not for the same reasons that he would apply. Does he mean that the pensioners are holding their breaths and wondering when they will be able to enjoy a decent standard of living? When he refers to it as a holding budget, does he mean that people on fixed incomes are holding their belts, ready to take them up another notch? Does he mean that ex-servicemen are holding their heads in disgust, waiting for the war service homes to which this Government says they are entitled but for which they have to wait for twelve months or more? Does he mean that the workers are holding on like grim death, waiting for their wages to be def rozen and for their margins to be restored? It is certain that big business monopolies are holding huge profits, but the housewife is holding daily audits to see whether she can cope with the ever-rising cost of living. Certainly the Treasurer is holding all the answers, but while all this holding is going on, the public are holding their noses. So I claim that the Treasurer, for the only time during the course of his speech, was quite realistic when he referred to the budget as a holding budget.

I am sorry that the Treasurer is not here, because I should like to convey to him the information that the Burdekin Valley scheme, the Tully Tails scheme and the Dimbulah scheme are progressing fairly well, because the Queensland Labour Government is determined that those areas shall be developed. The schemes are not proceeding as well as they would be if the Menzies Government had not repudiated the agreement made by Mr. Chifley with the Queensland Government to provide Commonwealth assistance for them. That agreement was repudiated despite the fact that the schemes had been described, not only by members of my party and by people who support it, but also by high and allegedly important members of the present Cabinet, as of great national and defence value.

I can assure the committee that the Minister for External Affairs (Mr. Casey) does not take to the air only to shoot eagles. On one occasion, he flew over these areas. According to public statements made by the right honorable gentleman, he did so in an endeavour to establish, at least to his own satisfaction, that the claims of the Queensland Labour Government were sound so far as the defence value and national value of the projects were concerned. He flew over the areas. Certainly he did not come down to earth to take a closer look at them. He did not clamber over the hills or traverse the rough roads and valleys in the surrounding districts. But when he came back from the trip, he stated to the press that the schemes had to be proceeded with because they were of too great national and defence importance to be ignored by this Government. The Treasurer himself, in his printed policy speech, stated that the Burdekin scheme would be carried on, and that assistance would be given by this Government. His words were - 1 can assure the people of Queensland that this matter will not lie pigeon-holed and used as a blueprint for depression.

But we find that these schemes, which have been accepted by all sections of the community as having a tremendous defence value, have not received ono penny by way of assistance from the Commonwealth. It is to the everlasting credit of the Labour Government of Queensland that it has determined that it will not be prevented from proceeding with the schemes as far as its financial resources will permit. While I am on my feet, being a fellow Queenslander of the Treasurer, I desire to convey to him the compliments of the people of Queensland and tell him, “ They are getting on quite well, thank you. but not half so well as they would if this Government conformed to the arrangement that it made and if the Treasurer had not repudiated what they accepted as a sincere promise on his part that financial assistance would he given by this Government “.

There is not much that can be said about this budget because nothing that the Treasurer said gives rise to serious debate. The budget is negative and futile. As I have said, it is a holding budget. The Government is hoping that it will be able to hold on to the coffers until there is an election, and then it will present au entirely different budget. However, this debate gives an opportunity to bring up matters which honorable members would have difficulty in raising on any other occasion. There are one or two matters I desire to deal with which do not relate directly to the budget.

Honorable members will remember that on Tuesday I asked the Treasurer a question as to the cost of the committee that was appointed to inquire into the re-introduction of taxation depreciation allowances. I make it perfectly clear that anything I have to say does not reflect on the members of that committee, including the honorable member for Petrie (Mr. Hulme) . I do not doubt his ability and capacity to head such a committee. I did not get the information I required from the Treasurer, but I have obtained it from another source. I wanted to know what the activities of the -committee, whose recommendations the Government had no intention of accepting even at the time it was appointed, cost the taxpayers of Australia. I have ascertained that that cost was in the vicinity of £2,500. I do not say that that is too much, having regard to the -act that those gentlemen had to travel from State to State in order to obtain -..he necessary evidence. Maybe it was not high enough. I am not querying the actual cost; I am saying that such cost should not have been incurred at all. Honorable members will remember that the Treasurer, during the course of his budget speech last year, said that the Government accepted the principle of a depreciation allowance and. admitted that there was merit in it. It does not matter whether I agree or disagree with that principle. The fact is that there was previously a scheme covering depreciation allowances and this Government suspended it. It said it was not suspending it for all time but wanted to obtain evidence in order to see exactly what merit the scheme possessed. The committee may or may not have done a good job, although the Treasurer says that it did. I am not concerned about that; what I am concerned about is that the Government appointed this committee which cost the taxpayers £2,500, and at the time it did so it knew that it had no intention of accepting the committee’s recommendations. The fact is that £2,500 was wasted. I know that in these days of prosperity and high costs the Government might regard the sum of £2,500 as a mere peanut; but my point is that it deliberately wasted that amount of money.

I wish to raise two or three matters which affect my electorate. The first concerns a man by the name of Leon Murphy, who is employed at the Ross River meat works in Townsville. Mr. Murphy is an ex-serviceman, and was stationed in England during World War II. Later, he served for some years as a member of the merchant navy. When he was due to be repatriated to Australia he was too ill to travel. He met and married a girl in Dublin, and subsequently applied to Australia House for an assisted passage to Australia for his wife and child. The application was granted, but a passage was not arranged during the ensuing four and a half months, despite repeated attempts on his part to make the necessary arrangements. It was not his fault that his wife and child did not come to Australia during that period. Eventually, he was notified that he and his wife and child would be accommodated on a certain ship coming to Australia, and that financial assistance would be provided in respect of his wife. However, at that time she was again pregnant and was not well enough to travel. In those circumstances, the man and his family did not then travel to Australia. Later, after the second child had been born and his wife was well enough to travel, he informed the authorities at Australia House that the family desired to come to Australia and renewed his application for assisted passages for his wife and children, but this application was refused. The position now is that Mr. Murphy is working in Townsville and his wife and family are still on the other side of the world. All attempts by Mr. Murphy, myself and others to obtain approval for the grant of financial assistance to enable his wife and kiddies to travel to Australia have met with dismal failure.

Mr Brand:

– What is the reason?


– If the honorable member for Wide Bay (Mr. Brand) can tell me the reason, we might both go to the Minister for Immigration and Minister for National Service (Mr. Holt), and inform him of it ; maybe we will then get somewhere with this matter. I submit sincerely to the Government that exservicemen are entitled to a bit of a “ go “. Recently, I received a letter from the Minister in connexion with the matter, and I have also received a letter from Mrs. Murphy, in England, enclosing a letter that she had received from the authorities at Australia House. It appears that, due to a minor technicality - because Mrs. Murphy was unable to travel when the passage was granted - the Department of Immigration has said, in effect, “ You would not go to Australia when it suited us, therefore, we shall not arrange for you to go at all “. 1 appeal to the Government to assist this man to get his wife and kiddies out from England so that the family can he reunited. I am sure that my appeal will be supported by all ex-servicemen on both sides of the chamber.

Recently, I inquired of the Minister as to the expenditure that was involved in assisting European immigrants to come to Australia. “While I do not for a moment suggest that the wives of Italian immigrants should not be assisted financially to come to this country - as they did recently in thousands - I contend that the wife and family of a man who fought the enemies of this nation are entitled to priority in this respect. Financial assistance has been granted to enable the Japanese wives of many Australian servicemen to come to Australia. [ do not query their right to such assistance, but surely to goodness, in the name of common decency, if it is fair for financial assistance to be granted to enable Italians who have never been in this country and might not, in the final analysis, be worth anything to Australia, to come here, accompanied by their wives and families, and the Japanese wives of Australian servicemen are helped likewise, a man who fought for this country is entitled to financial assistance to enable his wife and children to travel from England to Australia. I hope that the Government, in its great generosity, will give a little consideration to the fact that the ex-serviceman whom I have mentioned is separated from his wife and family, not through any fault of their own, but due to the stupidity of the departmental attitude - if not of the Minister himself.


– Why does not the honorable member read to the committee the relevant portion of the letter that he has received from the Minister?


– I have not time to do so in the period of half an hour allotted to honorable members during this debate, because I wish to bring to the notice of the committee other matters that demand attention. I shall leave it to the conscience of the Minister and all other supporters of the Government to see that the necessary assistance shall be provided in this case.

I come now to another matter which is under the jurisdiction of the same Minister, in his capacity as Minister for Labour and National Service, which concerns the small but important port of Lucinda Point. I am sick and tired of the attacks that are being made on waterside workers by newspapers and politicians, as well as by employers who do not know the full facts of particular occurrences. There have been ministerial and press attacks on the waterside workers at Lucinda Point, and I warn, not only the Minister but also any other honorable members on the Government side of the chamber who have it in mind to suggest that I am defending communism, that this is one port in Australia which is not in any way dominated by Communists. If there are Communists employed there, I am not aware of the fact and it is not my business. All I know is that the vast majority of the members of the Waterside Workers Federation at Lucinda Point are not Communists but are on the contrary, anti-communists. Although there are 104 members of the federation at Lucinda Point, the greatest number that can work on any ship calling there is 68 - that is, four gangs of seventeen. Yet the number of waterside workers at the port has been increased. I have written to the Minister and asked him whether he could explain why, at a time when there is so much talk about the slow turn-round of ships, and when sugar interests - whom I have represented from time to time - are talking about the slowdespatch of sugar from Lucinda Point, the Colonial Sugar Refining Company Limited has refused point blank to employ five gangs on a ship, because all of the ships which call at Lucinda Point have adequate handling gear to enable five gangs to work at once. Can any honorable member furnish a sane or intelligent reason for the company’s attitude ? It has simply refused to allow five gangs to operate. The result is that the waterside workers have to roster themselves off at times when they could be working on the wharf in order to get one ship away and the loading of another commenced. In reply to my communication, the Minister said that he would examine the whole question and let me know.

Mr Brand:

– It is a responsibility of the Queensland Sugar Board.


– It is most interesting to hear the interjection of the honorable member for Wide Bay that this matter is a responsibility of the Queensland Sugar Board. I could not care less whose responsibility it is, but I am seeking to point out that the waterside workers are not responsible. This is one occasion when there are no reasons for attacking them. The Government is pleading for a faster turn-round of ships, and I agree that that is necessary, but why cannot the authorities at Lucinda Point - whoever they may be - accept thenresponsibility and provide proper working conditions and facilities? The Government is calling for increased production and is alleging that the workers are not working hard enough. Is it not time that the employer gave the workers some consideration? I invite any honorable member who may be interested to visit the waterfront at Lucinda Point and examine working conditions. I direct attention to the washing facilities and the toilet system. It is the only wharf of its kind in Australia at which there is not a full-time first-aid officer. The employers refuse point-blank to appoint one. One of the waterside workers is the holder of a St. John Ambulance certificate, and if any one is injured he is called away from his job on the wharf or in the hold to render first aid. All attempts to secure the appointment of a full-time first aid officer at Lucinda Point have failed. I put these matters to the Minister in the hope that some satisfaction may be gained. Only by united efforts on the part of employers and employees can a faster turn-round of ships be achieved. It is pointless to blame the waterside workers for the slow turn-round of ships when glaring examples exist of the employers’ refusal to do their part.

I now wish to ask the Minister for Civil Aviation - who, I understand, is also a potential eagle shooter - when this Government, which contemplates spending £190,000,000 or £200,000,000 on defence, will face its responsibility of operating civil aerodromes in country centres. I have frequently mentioned in this House the scheme that was initiated by my colleague, the honorable member for Maribyrnong (Mr. Drakeford), when Minister for Air, under which country towns and cities could establish their own aero: dromes, and when they could prove by traffic figures that civil aerodromes in those centres were warranted, the Department of Civil Aviation would assume responsibility for their administration. The department would also reimburse the local council for its expenditure, and assume financial responsibility for maintenance. What better defence project could be undertaken than to establish aerodromes in as many country centres as possible, particularly in the vulnerable northern areas of Australia? The Government has ruled that it cannot take over an aerodrome if it is within 100 miles of one that has already been taken over by the Department of Civil Aviation.

The last time I spoke on this subject the Minister accused me of discussing it ad nauseam. I asked some of my colleagues what that expression meant and they replied, “ You are getting on his tripe “. I will continue to “ get on the Minister’s tripe “ because the establishment of aerodromes in country centres is well warranted. This Government has done nothing to alter the scheme devised by my colleague, the former Minister for Air. It has only repudiated its responsibility to implement it. There is an urgent need for aerodromes at northern centres such as Ayr, Innisfail, Proserpine, Ingham, and many other places. Local councils have spent £30,000 and £40,000 to build aerodromes, but they are useable only in dry weather. Aircraft cannot land on them on wet days. In reply to a request for help the Department of Civil Aviation has said, “ That is just too bad. You should not build your aerodrome within 100 miles of any aerodrome that has been taken over by the department “. If north Queensland is subject to an air attack the value of these aerodromes will be tragically apparent. It may be all right to have only one aerodrome in north Queensland, and to forget the others, if it has to be used on only rare occasions, as happened yesterday when an aeroplane was used to catch a runaway ; or to operate aircraft from it’ whose speed is governed to a maximum of 50 miles an hour. If this Government will not accept its civil aviation responsibilities let it face its defence responsibilities. The arguments I have advanced warrant the establishment of aerodromes in country centres for both civil and defence purposes.

One could deal with many subjects in this- debate. The Treasurer’s speech reminds me of an old saying, “It is better to keep your mouth shut and appear a fool than to open it and remove all doubt “. The Treasurer certainly did not follow that advice because, although he spoke for a long time, he said nothing.


.- I remind the honorable member for Herbert (Mr. Edmonds) of another old saying that more people have talked themselves out of Parliament than into it. I wish to bring the discussion of the budget back to the record of this Government as outlined by the Treasurer (Sir Arthur Fadden). All honorable members expected the right honorable Leader of the Opposition (Dr. Evatt) to attack the budget, but his description of it was certainly unexpected, and it was far from correct. The Treasurer properly gave a resume of the economic state of the nation from the Government’s point of view, and few would disagree with that outline. The Government came into office in December, 1949, and since that time the state of the country’s .finances has improved. In upholding the Government’s actions during the past year it is necessary for honorable members to understand why the Treasurer should have brought down such a budget as be did last week. The first point to examine is the Government’s action in relation to income tax. When the 1951 budget was introduced, it gave rise to a great deal of criticism throughout Australia, but honorable members will recall that when the benefits from that budget began to flow, many of the former outspoken critics were loud in their praise of the courage of the Government in introducing such unpopular, though temporary, measures.

In the 1952 budget the Treasurer removed the 10 per cent, income tax levy that had been imposed in 1951. In 1953, a further average cut of 12^ per cent., and, in 1954, a further average cut of 9 per cent, were made. Judged by overseas standards, Australia has become a low tax country. We have full employment, and in some cases over-full employment.

I remind the committee of this Government’s industrial legislation, of which great use, with great effect, has been made by the trade union movement. I also remind honorable members of the contribution that that legislation has made, with the co-operation of the trade union movement, towards industrial peace. Let me remind them, too, of the continual plea that has been made by the Government, and especially by the Prime Minister (Mr. Menzies) and the Treasurer, to the States for the implementation of a public works priority programme so that the more important things may be done in their correct order rather than many works being undertaken at the same time as we now see happening in so many of the States. One has only to look to the works, such as the Rum Jungle and Snowy River projects, for which the Australian Government has had the main responsibility, and then to the huge number of unfinished works such as railways, bridges, dams and the horror stretches of the roads in areas that many of us represent, to realize that the haphazard methods of the State governments have not been to the advantage of the country.

When one notes that within recent weeks the government of my own State of New South Wales has tried to attract a great deal of credit to itself for its imposition of prices control and for bringing down the price of toothpaste by a halfpenny, the price of a haircut by threepence, and that of bread by a penny, or whatever the amount was, and that, during the following week, it raised rail freights by 12J per cent., thus adding greatly to the cost of almost every commodity, one can easily see that that government is not contributing its share to the economic stability of this country. Although that action of the Government of New South Wales hits everybody within that State principally, it also has a reaction in the other States, because New South Wales is the leading industrial State of the Commonwealth. It hits the people who live in the country to a far greater degree than those who live in the manufacturing cities, because, in very many cases, the raw product travels from the country to the seaboard cities and the manufactured article returns to the country, so that the countryman, in quite a number of cases, has to pay the increased freights twice.

Whilst speaking of the plight of the country man, may I say that I think the Treasurer quite rightly drew the attention of honorable members and of the community generally to the prosperous state in which we find ourselves, whilst at the same time pointing out some of the dangers. Although there is general prosperity, although we admit those dangers, although we agree with the nature of the budget that has been presented for the purpose of maintaining that prosperity, and although this Government dislikes the imposition of controls and is hoping that private enterprise and the community generally will be able, by their own selfimposed controls, to help to solve the problems that we are now facing, there are other sections of the community that cannot be described as prosperous. Without going into any great detail, I refer, first, to the small acreage farmers - the dried fruit-growers, the berry fruit-growers in Tasmania, the egg producers in the various States, and the orchardists or citrusgrowers. We also know that the dairyfarmer is confronted by certain problems. Although I realize “that the full responsibility for home marketing, marketing organizations, and to a great degree the extension services of the State Departments of Agriculture, are the entire responsibility of the State governments, there are many occasions on which this Government can give assistance. I am glad to know that the policy of the Minister for Commerce and Agriculture (Mr. McEwen), which he has announced from time to time and which he again announced just recently, is that if any industry which finds itself in trouble draws up and puts before the Commonwealth an agreed plan, very sympathetic consideration will be given to assisting that industry in any way possible.

It is interesting to note, as an example of recent assistance that has been given to the smaller acreage producers who are responsible for producing food for both home and overseas consumption, that the Minister announced the other day that the Government had approved a programme of Australian trade publicity in the United Kingdom which will cost more than £250,000 within the next twelve months. The Minister, when making his announcement, said that the Australian Government would contribute £166,000 towards the first stage of the programme. One can see that that programme has been designed to meet the new marketing situation that has developed in the United Kingdom as a result, especially, of the new and keen competition that has developed from the return to tradertotrader conditions. The programme will recognize the necessity of maintaining our export earnings and of developing basically a sound organization for the future in Australia’s most important market which, speaking from memory, is worth in the vicinity of £100,000,000 annually. Honorable members will realize that the campaign will meet the immediate publicity needs of such export items as butter, cheese, eggs, wine, dried fruits, apples, pears, canned fruits and canned meats. I believe that it will be of great assistance to the kind of primary producer whom I have just mentioned.

There are other ways in which this Government has been helping. As another example, I refer to the assistance given in the area that I represent by the Commonwealth Scientific and Industrial Research Organization by the establishment of a laboratory to investigate and to help the farmer to meet the various problems that are associated with the growing of fruit. Excellent work has been done in the extermination of fruit fly and the control of blue mould. Although I have pointed out that the Government has little responsibility for the actual marketing of these goods, it provides money through the States for the extension services that are provided by the State Departments of Agriculture.

I should like to refer now to repatriation and social services benefits, because the budget foreshadows quite a number of amendments to the Repatriation Act and the Social Services Consolidation Act. As honorable members know, those amendments will provide for an increase of the base rate and special rate pensions. Without going into too great a detail, it is only right, to obtain the background of the proposed increases, to draw the attention of the committee, first, to what the Government has done in relation to war pensions and allowances. Before this Government assumed office, the general rate pension was £2 15s. ; it is now proposed to raise it to £4 15s. The special rate pension, which is the position that is payable to totally and permanently incapacitated ex-servicemen, was £5 63., but it is proposed that it shall be raised to £9 15s. Those increases in the war service pensions and civil pensions have been described by a completely independent authority, not only as more than most of those sections of the community expected to receive from this budget, but as offsetting the rise in the cost of living and increasing the real value of the pension for the first time in recent Australian history.

Prior to this Government’s coming into power, war widows were paid £3 a week. Under the present proposal, the full pension rate will rise to £4 10s. a week. Prior to this Government’s coming to office, the domestic allowance was only paid to war widows with one or two children under the age of sixteen years. The Government has extended the domestic allowance to all widows with children under sixteen years of age, irrespective of the number of children. The domestic allowance is now also granted to a widow who is over 50 years of age or who is permanently unemployable. The domestic allowance payable in respect of children will be continued as long as the child, or one of the children of a widow., is not earning the adult wage, and is undergoing education.

Before the present Government came into power, if a war widow remarried, her pension was stopped immediately, because it was understood, quite rightly, that her husband by her remarriage would be responsible for her support. But the Government found that the sudden cutting-off of the war widow’s pension upon her remarriage caused her a great deal of inconvenience and financial embarrassment, especially in connexion with the purchase of clothes and household necessities. So the Government has granted the war widows a gratuity upon remarriage, with a minimum sum of £208. The Government has also made it possible for the war widow to receive her allowance by cheque instead of requiring her to call at a post office. This practice was found inconvenient in many instances because of the obligation of the widow to care for her children.

I have given only a brief part of the history of the Government in relation to war service pensions. I should now like to refer to the budget proposals relating to what are known as “ ceiling limits “, because some confusion has been evident in the House and in the country on this subject. The Government has proposed the repeal of certain sections of the Repatriation Act and the Social Services Consolidation Act. The proposal is to abolish the limits on the total amount that a person may receive by way of civil pension together with a war pension. By “civil pension” i3 meant an age pension, an invalid pension, a widow’s pension, or a war service pension as distinct from a war disability pension. The granting of a civil pension is subject to a means test, and the permissible income at present is £3 10s. a week. Before these proposals come into operation, a single person may have an income of £3 10s. a week, and a pension of £4 a week under the increased rate, making a total of £7 10s. a week. A married couple may have an income of £7 a week, and a pension of £8 a week, making a total of £15 a week. But .a civil pensioner whose additional income comprises war pension only, may not receive the limit of £7 a week, because the ceiling limits have been lower than the limits in relation to civil pensions plus, for example, income from a superannuation fund.

Mr- Francis. - That provision was inserted in the legislation by the Labour Government.


– That is so. Under the increases announced in the budget, the single person in receipt ‘ of superannuation of £3 10s. a week will be able to receive an age or invalid pension of £4, bringing bis total weekly income to £7 10s. If, however, his source of income apart from the civil pension were a war pension of £3 103., he would only be able to receive an age pension of £2 12s. 6d., bringing his total income, under the ceiling limit, to £6 2s. 6d. The Government has proposed the abolition of those ceiling limits, so that the civil pensioner whose other income comprises a war pension, will not be worse off than the civil pensioner with other income. He will be able to receive, in the form of war pension and civil pension, the full amount of income receivable by a civil pensioner.

The other matter that I should like to mention while speaking on the subject of pensions and superannuation, is an anomaly which I had hoped would have been removed by the budget. I bring it to the attention of the Government so that it may receive consideration when the budget is being prepared next year. I refer to the necessity for widening the means test in one direction. Under the Social Services Consolidation Act, a married person may receive an income of £7 a week without the rate of his pension being effected. If his income is over £7 a week, his pension is reduced, pro rata, no pension being .payable when the prescribed maximum income is reached, or if the person has assets worth more than £3,500. Let us consider the person who, because of the nature of his employment or because he is self-employed, is unable to contribute to a superannuation fund and who desires to save for his old age. He may save by putting money into the bank or into investments. Under the present means test, even if he saved only £500, the annual rate of his pension would be reduced by £0. Under the -wider provisions which the Government introduced last year, income from investments is no longer taken into consideration when assessing the pension.

The amount that a man would have to save and invest in order to obtain an income of £7 a week is far greater than the total contributions that he would have to make to a superannuation fund in order to obtain £7 a week in superannuation. Whilst we have done a great deal to help those who have saved by way of superannuation contributions, this anomaly still exists. I believe that it should be abolished to enable the person who has not been able to join a superannuation fund to receive the same benefits as those who are in receipt of superannuation. I know it is not possible, and it would not be wise, to abolish the means test, but I suggest that in widening its provisions the limiting factor be the income from investment, rather than the capital value of the investment itself. I think that, by that means, we shall be able to assist pensioners greatly.

I am very glad that the Government has been able to increase various forms of social services and repatriation benefits. I suppose that at no one time will everybody concerned be completely satisfied with the respective increases. There will always be a cry for higher pensions, and in many individual cases one would like to give as much as possible, but when one considers the economic state of the country, as outlined by the Treasurer, one realizes how well the Government has done to ‘have been able to grant the increases that it has granted.

The problem of providing social services benefits, including benefits for aged persons - and ageing persons - is increasing in importance as tune goes on. Last year I regretted very much the tendency shown by certain members, though not all. members of the Opposition, to try to make the pensioner problem entirely a political matter and also to try to organize pensioner associations along political lines. I believe that the solution to the pensioner problem does not lie in either of those directions. It lies in the co-operation, in their thinking and actions, of all sections of the community. In making that statement, I realize that the responsibility for determining policy finally lies with the government of the day, because it has the task of levying taxes and the responsibility for the expenditure of the nation’s funds. Whilst the final decision must, therefore, lie with the Government, I believe that a great deal of assistance towards a solution of the problem would result from co-operative thinking and action on the part of all sections of the community As I have already mentioned, the solution does not lie merely in increases of the rates of benefits. There are other things that we should do also, and indeed we are doing them. I am glad to see, for example, that the Government is continuing to make provision for a subsidy of £1,500,000, on a £1- for-£l basis with charitable organizations, for expenditure on homes for the aged. That is a particularly pleasing feature of the budget, because one of the great problems that we have to solve is that of lonely, aged persons in the community, both male and female. Aged married pensioners should be able to spend the closing years of their lives together, and we owe it to them to ensure that they will be enabled, to live in congenial and comfortable domestic conditions.

Lack of time prevents me from discussing several other matters arising from the budget, but I shall sum up my views by saying that the tenor of the speeches we have heard from honorable members, including the Leader of the Opposition, shows that, in their own minds, honorable members opposite agree with the budget provisions, since they have offered very little constructive criticism of them.

The Treasurer has shown a great deal of courage in bringing down, in the present circumstances, a budget of this nature. I believe that the nature of the budget has been conditioned by the fact that the Government, and the Treasurer, having faith in the native initiative of the Australian people, rather than impose more controls, have produced this “ holding “ budget in the belief that the community will exercise control over itself.

Mr. BIRD (Batman) [12.01.- As _ a rule, federal budgets are received with mixed feelings, and evoke differing opinions in the community. But it can be said safely that this budget has aroused only one opinion in the country, that is, that the budget is unworthy of this Parliament, and shows that the Government is rejecting its responsibility to grapple with the various problems that confront the nation. It has definitely been received all over Australia with blasts of derision and contempt. The Treasurer (Sir Arthur Fadden) commenced his dissertation on the budget on Wednesday of last week by giving us his opinion of the state of the nation’s economy. As I listened to him my mind went back to last year, when he introduced the previous budget, because I well remember, as do other honorable members, that on that occasion we were treated to a similar dissertation from him. In his budget speech last year, the Treasurer said -

There can be no mistaking the signs that stresses are again threatening to develop in our economy.

After the Treasurer had given what I had then considered to be a correct diagnosis of the position in 1954, I thought, and the nation thought, that the Treasurer, and the Government would have given the country a lead and would have submitted to this Parliament a programme of legislation designed to carry out a policy aimed at solving, or at least easing, our economic problems, and preventing any recurrence of inflation as we have known it during the life of the Government. The fears of the Treasurer last year should have been translated into a series of legislative enactments calculated to prevent any possibility of the return of inflationary pressure. But, as everybody knows, nothing in that direction has been done in the year since the Treasurer expressed those fears. The Government definitely refused to grapple courageously with the problem that then existed, and it is not to be wondered at that the state of the economy has wobbled somewhat precariously, as a result of the Government’s ineptitude and its definite refusal to bring before this Parliament positive measures to deal with economic problems.

The Treasurer confirmed, in his budget speech last week, the forebodings that he made in his previous budget speech. After hearing his forebodings last week we naturally sat back in a state of expectancy and waited for a preview of the measures that the Government would introduce, in this sessional period, to prevent, in a strong and positive manner, continuance of the inflationary spiral. But what happened? What did we get? We got a collection of airy phrases that meant, in effect, that the Government proposed to do very little. Like Mr.

Micawber, the Government is hoping that something will turn up. Instead of the strong and inspiring lead we looked for from the Government, all we got was pathetic pleading by the Treasurer to the community to exercise restraint. We got verbal admonitions to private enterprise. Everybody knows that private enterprise will not take the slightest notice of any strictures that the Treasurer may direct to it. At a time when wise and firm leadership is needed in this country all we get from the Treasurer is a pathetic appeal to business not to engage in a cut-throat competition for labour and materials. Who will take any notice of that? The Government has failed miserably to grasp the opportunity, which lay on its doorstep, to introduce measures that would have as their purpose the reinstatement of economic equilibrium. Instead of action, or even the promise of action, we got nothing. Consequently, it is not to be wondered at that the people are at a loss to know what the Government’s economic policy is. It is true that the Government has decided to increase pensions by a very meagre amount. Frankly, I do not consider the proposed increase of 10s. is anywhere near enough. An increase of £1 this year would be necessary to give the same value to pensioners as an increase of ten shillings last year would have given them. The Government has more or less side-stepped the issue by offering a paltry 10s. increase, and I am quite certain that it has no idea of what the pensioners should, in their presentsituation, really receive in benefits. I again put forward what I suggested last year, and what I have suggested in question after question directed to Ministers of this Government during the last twelve months: That is, that the only way that a proper assessment can be made of the needs of pensioners is by a judicial inquiry set up by the Government to take evidence on living costs. If that were done we could arrive at an amount to be paid to the pensioners upon which they could be expected to live in a minimum of comfort.

For some extraordinary reason the family man is to get absolutely nothing under the budget. At a time when Australia needs population more quickly than it has needed it at any other period of its history, no encouragement at all has been given to the family man. No increases of child endowment have been foreshadowed by the Treasurer, and family allowances under the tax schedule have not been reviewed. I suggest that the Government should at least have made a gesture to the family man by reviewing those family allowances.

The next matter that I desire to speak about is extremely important. As a municipal councillor, I make the most forthright protest against the failure of the Government to relieve municipalities of the burden of pay-roll tax. Municipalities and other local governing bodies render splendid public service throughout the Commonwealth. They perform many functions which are the responsibility of the federal and State governments, and in return for that work they receive very little recompense from State governments and none at all from the Federal Government. I expected that this Government would have realized by this time that these most worthy public instrumentalities should not be any longer called upon to pay pay-roll tax. I am well aware that many honorable members on the Government side are in full agreement with me in this matter. It is not a party matter, because last year local government organizations throughout Australia condemned the Government for its refusal to relieve them of the burden of pay-roll tax. Again this year the Government has done nothing for local government bodies through the budget, and has failed to recognize the services that they render in the public life of this country.

I shall now deal with a problem that the Government has refused to face squarely at a time when everybody was expecting a positive lead from it. The matter that I refer to is the parlous state of our roads. According to the budget speech, the Government will this year allocate £2,250,000 more from the proceeds of the petrol tax to the States, and expects to pay 26,500,000 to the States on account of the petrol tax. Now, anybody who has any sort of knowledge at all of our roads, knows perfectly well that that amount is by no means sufficient to enable the States to bring our roads up to date. The petrol tax yields about £34,000,000 a year to the Commonwealth revenue, but, as I said previously, the States will get only £26,500,000 out of that amount, and the Commonwealth will retain about £7,500,000. It should all be paid to the States.

Let us make a detailed analysis of the revenue that is collected by the Australian Government from the motor industry. It is quite apparent that the Government is not erring on the side of liberality by granting £36,500,000 to the States out of the proceeds of the petrol tax, because in addition to the £34,000,000 that it will collect in petrol tax this year, it will collect £23,000,000 from sales tax on motor vehicles, £7,500,000 from sales tax on tyres and spare parts and £6,000,000 through the Customs Department in duties on imported vehicles and parts. It is therefore quite clear that although a very large sum of money is flowing into Consolidated Revenue from the motor vehice industry, very little of it is being used to make the roads trafficable and safe for motor vehicles to use.

I suggest that the large sum obtained from the motor industry should be devoted to increasing the efficiency of our road system. One great anomaly in the system of taxation of motor vehicles is that although there is a tax on petrol consumed by petrol driven vehicles, there is no tax on diesel fuel. It is quite obvious that there is an increasing number of large trucks and freight carrying vehicles that are using diesel fuel but, apart from increased registration fees, taxes have not been levied on those vehicles although they do far more damage to the roads than do the lighter petrol driven vehicles. I suggest that the Government should give immediate and urgent consideration to imposing a tax on diesel fuel. Diesel driven vehicles are the biggest and heaviest vehicles using our roads at present, and larger and larger vehicles are continually being placed on the roads. But, although they do an enormous amount of damage to the roads they do not have to pay tax on the fuel that they use. There is no doubt that the- Government is very well aware of those facts, but it has made no endeavour to grapple with the problem and impose a tax on diesel fuel at the same rate as the. tax on petrol fuel.

Some years ago, an organization was formed which is known as the Australian Transport Advisory Council. It was formed for the ostensible purpose of grappling with the problem of our roads, and it consists of representatives of the State and Federal governments. The present chairman of that council is the Minister for Shipping and Transport (Senator McLeay), and the council has periodical meetings and obtains a great deal of publicity about what it intends to do. However, when inquiries are made as to what the council has actually done, it is found that it has done disappointingly little. Up to the present time, nothing of a tangible nature has been done at the numerous meetings of the Australian Transport Advisory Council. This year, the council has had three meetings, and I was hoping that, because of the vast amount that has been said about roads by sections of the motor trade, by all State governments and local government bodies and by honorable members of this House, the council would have attempted to grapple with our road problems. Indeed, I was under the impression that it had done so, and that the budget would produce a national plan for improving our roads. Of course, I was greatly disappointed to see that there is not a word about roads in the Treasurer’s budget speech. He has only said that the States are to receive £2,500,000 more this year than they received last year out of the proceeds of the petrol tax. Nowhere in the budget is there any indication of an agreement between the State and Federal governments on a practical plan to improve our existing roads and provide a new national network of modern roads.

The Government cannot claim that it has not sufficient money to improve our road system, because the Treasurer has a surplus this year of about £48,000,000. I suggest that in addition to that vast sum of money he should be able to find money from another department, for the use of which nearly £200,000,000 has been allocated under this year’s budget. The inadequacy of the highway system throughout Australia is plain for all to see, and roads are fast deteriorating under the increased, traffic. Anybody w.ho studied the transport problem during the last war, when this country was threatened with invasion, knows perfectly well that national roads are vital to defence and development. Yet this Government has persistently evaded its responsibility, and, to its discredit, has left the matter in the hands of unproductive conferences like those of the Australian Transport Advisory Council that I have mentioned.

I admit that the difficulties are great, but, after all, difficulties of this nature are made to be solved by parliaments such as ours and those of the States; but the difficulties cannot be tackled until a national view is taken of our roads and works problems. “What is required is a lead from this Government. If the Government were to approach the Australian Transport Advisory Council, or if it were to place a proposition before this Parliament, I am satisfied that unanimity could be achieved among the six States, because they are the poor relations. They are prepared to take anything from this Government if it will help them solve their road problems.

From my understanding of the position after reading reports of deliberations of the Australian Transport Advisory Council, immediate financial problems appear to dominate all other considerations in this matter. It is true that the Government has made larger petrol tax grants to the States, but I do not suggest for one moment that the only solution of this problem is to give all the petrol tax receipts to them. Such a payment would certainly represent a step in the right direction; but any one who thinks that the problem would be solved if the Government were to say, “ Righto, we shall give you the £34,000,000 this year “, and then, like Pontius Pilate, proceed to wash its hands of the whole matter, does not know anything about it. We have got to look at this issue from a practical viewpoint.

The first point I want to make, in doing so, is that whatever we may think of other forms of transport, there is no doubt that road transport has come to stay. Road transportation will increase, not diminish, and it will play a major role in the years ahead in the development of this vast country. The problems of the road situation to-day can be epitomized very briefly. They are that Australia’s main roads are too narrow, and their construction is too light to carry modern motor traffic. Most of the bridges were built in the pioneering days; they are too narrow, and they are decaying fast, because many of them are built of wood. Road vehicles are growing in number, size and weight. All this demands wider roads of a heavier type of construction, the abolition of dangerous bends and culverts and widespread extension of all bitumen surfaces.

What is the position to-day? Practically the whole of the money now being allocated to roads from both Commonwealth grants and registration fees and other methods of raising money in the States, is being spent on maintenance. From a statistical viewpoint, a little more than three-quarters of the amount being allocated for road purposes is used for the maintenance of existing road surfaces. Roads cannot be widened, new bridges cannot be built to the extent that they should be, and we cannot build dual highways along busy thoroughfares because there is no money available for the purpose. At least SO per cent, of the money that is being spent on roads to-day is being expended on maintenance, and that is not a common-sense approach to the problem. The position is getting worse, because this Government will not give a lead to other governments and authorities at the meetings of the Australian Transport Advisory Council.

It is not possible for the States to increase road grants, because they are dependent on hand-outs from the Commonwealth. If they did decide to increase their respective road grants, they would have to reduce the amounts allocated to the construction of schools, hospitals and other urgent works over which the States have complete autonomous control. Logical reasons can be advanced as to why the Federal Government should give an increase. When I speak of an increase, I do not mean an increase from the petrol tax, but increases in the amounts given to States for road purposes. First, the adequate defence of this Commonwealth is partly dependent upon a sound highway system. Secondly, good roads are needed to provide and maintain postal, telegraph and telephone services, all of which are the responsibility of the Federal Government. Thirdly, adequate and well-maintained highways are necessary for increased efficiency and income from all industries. Fourthly, sound road development is beyond the financial capacity of the individual States.

It seems to me most unrealistic on the part of the federal authority that, while providing £200,000,000 in its budget for an efficient defence machine, it should not provide enough money for roads to carry this defence machine. It has been estimated by reputable road authorities - the figures are not mine - that 20 per cent, of the roads necessary for Australia’s development must also be regarded as defence roads. I make no secret of the fact, and I make no apology for suggesting, that £20,000,000 of this year’s defence vote should be devoted to the improvement and construction of roads in this Commonwealth. That is not an unpatriotic suggestion because, if what I suggest is done, the defence system in this country will be much more efficient than it is under the present inadequate road set-up. There is not the slightest doubt that £200,000,000 is devoted to our defence system each year, and it is never spent. I suggest that £20,000,000 should be spent on roads. Such an amount could be spent at the end of twelve months if it were devoted to the construction and maintenance of roads.

Statistics show that the whole financial approach to the road problem has not kept pace with development in other spheres of national development. In the past fifteen years, Australia’s population has increased by 2,000,000, our factories have increased by 70 per cent., our industrial output has increased by 400 per cent, and our national income has increased by 360 per cent. But in the same period our roads have extended by only 5 per cent. According to figures issued recently by the big newspapers of the capital cities, only about one-quarter of the road length of Australia has been actually constructed. The remainder, for the most part, is little more than in its natural state. Such a position cannot continue. Because of the recent decision of the Privy Council with regard to road hauliers and the rights of the States to restrict their movements, we have to consider the problem from the standpoint of freights. To-day, 76 per cent, of Australia’s freight is carried by road vehicles. Australia’s growing dependence upon motor vehicles - and, as a result, upon its roads - can be illustrated by the fact that last year the population increased by 180,000, while in the same period the number of motor vehicles on the roads increased by 180,000. The proportion of motor vehicles to population is one vehicle to every 4.7 persons.

Last year about £60,000,000 was spent on road construction by Commonwealth and State governments and municipal authorities. Most of that money was spent in patching old roads, although a few new roads were constructed. That position cannot continue, because of the high cost of road construction to-day. The cost of building one mile of main highway averages £50,000, whilst maintenance requires about £500 a mile each year. A light-sealed road costs about £3,000 a mile, and about £40 a mile each year for maintenance. But those figures sink into insignificance when compared with the high costs associated with road construction overseas. Recently, in Britain it was decided to construct roads at a cost of £240,000 a mile. Those figures hardly bear comparison with £50,000 a mile in Australia, but the position is worse when we reflect that most of the money expended on our roads is used to patch up old roads. Since 1920 the petrol tax has yielded £310,000.000, of which £142,000,000 was allocated for roads. The remainder has gone into general revenue. But even if the whole of the revenue derived from the petrol tax were devoted to road construction it would not solve the problem. Australia has much leeway to make up. In saying that, I do not condemn the present Government in particular. For the fact that the States have not been able to make all the roads necessary, this Parliament has something on its conscience. That is an added reason why we should now do something to make up for our sins of omission in the past.

There is an almost universal realization among members of all political parties that road construction and maintenance is a matter of major importance. We must realize that we cannot maintain highways in 1955 on the basis of 1920 methods and finance. There can be no piecework solution of this problem ; it is a national problem which must be solved on a national basis. Unfortunately, the Commonwealth Government, which should give a lead in national matters, has shown a reluctance to deal with this problem, so that it now assumes the proportions of a potential national calamity.

As the Opposition has been accused on many occasions of dealing only in destructive criticism, I propose to offer some suggestions of a constructive nature to the Government. The Government has a golden opportunity to give a lead in this field by announcing that it is prepared to assume financial responsibility for all highways linking the capital cities of Australia. That would be an excellent first step in a national plan. It would enable the States to concentrate on other roads within their boundaries, and even the most diehard State righters would not oppose such a policy. The machinery to bring about the necessary co-ordination between Commonwealth and State authorities is already in existence. The Transport Advisory Council could be the instrument to bring about an agreement between the seven governments of Australia. We have all the things necessary to establish a successful partnership to deal with this problem. The State governments have in their services men with the necessary technical skill to build and maintain roads. In passing, I pay a tribute to them for the wonderful job that they have done on a very limited exchequer. When we consider the small amount of money that they have had, we must conclude that they have achieved wonders, even beyond the capacity of Mandrake. In addition, nature has given us an abundance of road-making material ; we have in this country almost unlimited supplies of stones, sand and materials for manufacturing bitumen and cement. There is no need to import these materials for road-making purposes. Moreover, our secondary industries are capable of making all the road-making machinery we require.


– Order! The honorable member’s time has expired.


– At the risk of embarrassing the honorable member for Batman (Mr. Bird), I congratulate him on his speech. It was a speech well prepared and well constructed, and it came like a breath of fresh air to clear the atmosphere created by some most unrealistic speeches made by other Opposition members. The honorable member for Batman addressed himself to the problem of transport, which represents about one-third of the high costs which affect us to-day. By his constructive suggestions he has shown himself to be not only patriotic, but also capable of making a contribution towards our economic good. I suggest to him that he should look at the question of transport not only from the point of view of transport by road, but also transport by sea, by railways and, to a limited degree, by air. Figures supplied by statisticians reveal that ships still carry 40 per cent, of ton mileage in Australia, notwithstanding that we have no internal waterways in use to-day. Roads carry 32 per cent., and railways 27 per cent, of our ton mileage. The honorable member for Batman suggested that something more should be done to provide capital for the motor trade. In the course of his speech, he told us that about 180,000 new cars were placed on Australian roads last year, and that Australia’s population had increased by about 180,000 in the same period. From those figures, it would appear that Australia’s economy is buoyant. We must not lose sight of the fact that railways and ships carry most of the heavy loads, and are making their contribution to the country’s needs. 1 suggest that the honorable member should give to transport by ships and railways the same thought as he has given to transport by road. He should have regard to the re-investment of capital in those spheres and to the great difference that the use of diesel electric locomotives has made to railway costs. When he ha? done so, I hope that he will make another constructive contribution to the debates in this chamber. The honorable member’? speech this morning was in strong contrast to that of the Leader of the Opposition (Dr. Evatt), whose speech was most ineffective, because he attacked reinvestment in Australia. Investment means giving the working people of Australia more electricity, more electrical equipment, more machines, and so on. We have in Australia companies, such as the Broken Hill Proprietary Company Limited which, as we saw on Tuesday, can provide that equipment. The provision of more capital equipment would enable us to construct and maintain our highways in good condition.

I shall now address my remarks to the balance of payments problem and Australia’s economic position generally, with special reference to the dairying and poultry industries. Our traditional and historic difficulty is now again confronting us through the fall in the prices realized for wool and other rural commodities. The poultry industry has been forced to charge high prices for its products, in order to meet losses incurred in overseas markets and to meet the competition of other countries which subsidize their industries. The poultrymen have to bear the cost of the higher wages advocated by the Leader of the Opposition, as well as higher freight rates and the increased costs of various kinds of equipment. Australia is selling flour overseas at good prices, but our poultrymen have to bear higher costs for wheatmeal and other materials needed in their industry. It can be said truthfully that the poultry industry is one of the casualties resulting from rising costs within Australia and falling prices outside Australia. The dairying industry is facing a similar position. The people at home are called upon to pay nearly 4d. per lb. more for their butter, although the dairy-farmer receives 4d. per lb. less for his product.

The Leader of the Opposition, the honorable member for Blaxland (Mr. E. James Harrison) and other honorable members opposite, who talk about higher wages, and hardships which do not exist, forget about the industries which are insulated against lower prices overseas. The transport and building industries arc protected because they sell on the

Australian market at fabulous prices and do not have to meet competition from low-priced overseas products. This situation would be exacerbated if the suggestions of the honorable member for Blaxland and the Leader of the Opposition were adopted. Honorable members opposite have allowed their experiences in their public duties to distort their views. I agree that they deal most sympathetically and efficiently with hardship eases, which often are the only ones that are referred to members of Parliament. If honorable members opposite base their view of the condition of the Australian economy on hardship cases, they misjudge the position. This is a healthy, vigorous and enterprising young country, and it should not be judged by the very small percentage of unfortunates who from day to day approach members of Parliament seeking assistance. It is true that we are able to help them because of the generous social services provided by this Government out of our prosperous and expanding economy.

The honorable member for Blaxland, when he talked of hardships, spoke as if he were addressing an industrial tribunal in about 1935. The honorable member was thinking twenty years behind the times. He talked about hardships experienced by trade unionists. I remind him that his type of thinking prevented the re-investment of capital in the railways. The honorable member for New England (Mr. Drummond), from his experience in the New South Wales Parliament, will agree, I am sure, that the attitude of the unions, including the Australian Federated Union of Locomotive Enginemen, of whom the honorable member for Blaxland has been federal president, was partly responsible for the failure of the railways to obtain much-needed capital. The unions criticized the high interest rates paid on capital invested in the railways on the ground that it injured the cause of trade unionists. Interest rates paid on railway investments were used as an argument against further capitalization, with the result that the railways could not get capital and they became expensive and uneconomic to operate. The honorable member for Blaxland talked about hardships, but he forgets that, in spite of a few hardships, Australia is a prosperous country. I have had a report from our canvassers that, in a comparatively short street in Sydney, every house but one has two cars, and that one has three.


– Which street is it?


– The honorable member knows that there is a colossal measure of prosperity and well-being in his present electorate and in the Kingsford-Smith electorate for which he is seeking pre-selection as the Labour candidate at the next general elections. The Australian Labour party’s rooms in the Kingsford-Smith constituency are next door to the Liberal party’s rooms. Long, sleek, American limousines draw up to the door of the Labour rooms, whereas “ jalopies “ bring Liberal party supporters to the Liberal rooms. Yet the honorable member for Blaxland talks about hardships! A steel worker in my electorate told me that he earned £105 a fortnight. I remarked that I supposed he had to run an expensive car to get to work. He replied that he did not and that if he were wanted, his employers had to send someone out to get him. He added that he worked two shifts and that, though at times he could sit down and watch the machines, at other times he could not find time even to eat a sandwich. He stated also, “ I have never voted Labour in my life, because they are too dull, drab and regimented “. The other day a young school teacher told me that she was paid £850 a year, and that she spent £4 a week, or £208 a year, on living costs. The Leader of the Opposition and the honorable member for Blaxland should think carefully before they cry hardship. They merely judge the rest of the Australian people by the poor unfortunate widows and disabled and infirm people who approach them for help, which they are often able to give because this Government provides such generous social services.

I wish to deal mainly with the situation in what I shall for the moment term certain distressed industries and with their importance to the balance of payments and the condition of the Australian economy. Recently, the dairying industry has had to face falling prices on the overseas market. Let me make it clear that in the last year the price of butter has fallen by 9£d. per lb. sterling, which is the equivalent of nearly Is. per lb. Australian. In April last the price stood at 410s. a cwt., and in July it fell to 322s. a cwt. The Australian Dairying Equalization Committee Limited was forced to reduce the interim payment in July by nearly 4d. per lb. The dairyfarmers, who are represented in this chamber by many honorable members on this side and by the honorable member for Eden-Monaro (Mr. Allan Fraser), cannot understand why the consumer must pay 4d. per lb. more if they are receiving 4d. per lb. less. This is due to the impact of the London fall. The consumers have shown that they do not mind paying a little more. I am happy to be able to inform the House that the consumption of butter has not declined one iota in the two months since the price was increased. Some storekeepers are using butter as an attraction line by reducing the price of this precious article slightly so as to bring people into their shops to buy other goods. People do not mind paying a little more for butter if the hard-working dairyfarmer gets the benefit of the increased price, and they cannot understand the reason why he does not get the benefit. Unfortunately, some blame was first attached to this Government because of an infinitesimal reduction of the subsidy by about £d. or two-thirds of a penny per lb. The main cause of the widening gap between the return to the farmer and the price paid by the housewife is the reduction of overseas prices. This is our traditional problem with many industries in relation to the balance of payments. We face reductions in export prices that are considerably lower than is the cost of production.

At present the price of Australian butter in England is about 2s. 10W. per lb., or 322s. per cwt. I am glad to be able to inform the committee that that price is firm. The Russians are getting ready for the European winter and are buying Australian butter, and West Germany also is looking for butter. I do not want to create too much optimism, but the position is a little buoyant. One of the reasons for the reduction of payments by the equalization committee was that it was unsure of overseas export returns and it wanted to conserve funds to meet whatever circumstances might arise. We may expect that the export returns will remain buoyant, because the price of cheese has been increased and because the consumption of butter has been maintained in spite of panic buying ten days before the increased price was announced. Some large firms bought considerable quantities of butter, and they have since continued to place their normal orders. As a result, consumption has not declined.

Since overseas prices and the rate of consumption are being maintained, could not the Minister for Commerce and Agriculture (Mr. McEwen) suggest to the equalization committee that it increase the first conservatively low returns to the dairy-farmers in order to relieve their anxiety about the situation that has been created and give them confidence to maintain the level of production necessary to ensure our export returns from dairy products? At present, Australia receives between £18,000,000 and £20,000,000 a year from butter. Every pound that we earn overseas is beneficial to our economy. Economists talk of the rural multiplier. Every pound earned from the products of the land is multiplied four times in the benefit it gives to the economy. I. think it probable that every pound earned by exports is multiplied by ten. If we lose our export income, which is really rural income, the people whom the Leader of the Opposition wants to benefitby increasing wages will lose, because they will find the economy crashing about their ears. Our income from exports is indeed a precious thing. Immediately returns to the dairy industry, the poultry industry and the other industries on which we depend for our exports of primary products are reduced, the flow of imports n which many workers depend for their employment must decline. Every pound of cheese, butter and sugar and every dozen eggs exported help us to import materials required for other industries which provide employment and on tho prosperity of which higher wages depend. I appeal to honorable members opposite to be realistic.

The Leader of the Opposition stated that we must be careful about expanding private investment. Would not additional private investment enable us t<reduce costs and market our surplus primary products on more favorable terms < There is no denying the fact that we must increase capital investment in locomotives, machinery and all sorts of equipment in order to increase production and reduce costs. The Leader of the Opposition was grievously mistaken in criticizing an expansion of private investment.

Sitting suspended from 12.46 to 2.15 p.m.


– When the House rose for lunch I was referring to the importance for Australia of the balance of payments, and the effect of a deficit. Those are rather horrible words, and I do not blame the Labour party for failing to understand what they mean; very few people do. I will try to explain their meaning to honorable members opposite. Perhaps when I do, the smile on the face of the honorable member for Blaxland will disappear, because he is a trade union leader and represents an industrial electorate. A deficit in the balance of payments means that less money will be available to buy goods that are normally reprocessed in this country. That, in turn, means less employment and less loan money for building. The honorable member for Blaxland, who has been Federal President of the Australian Federated Union of Locomotive Enginemen supports his leader who has advocated the unfreezing and raising of wages, but they forget the indirect effect that this would have upon the employment of those whom they represent, and upon other trade unionists. If any proof is needed one can look at the import licence position. If exports continue to fall with the drop in overseas prices, imports will have to be restricted, there will be less employment and less chance that the worker will be able to continue to receive a high wage. Those of us who have goods to sell applaud the fact that the worker has high wages, for this gives him an enormous purchasing power and standard of living and makes for a sellers’ market in this country. If Labour continues to turn its back upon realities it will bring upon its trade union supporters the very thing that they most dread. Let the Labour party face the fact that our rural export income must be greater than our expenditure on imports. A deficit does not merely mean the running down o£ the London funds, but also financial stringency in this country and difficulty in obtaining finance for home building. It has an immediate effect upon the whole country and therefore, upon the workers themselves. The unfreezing of wages would lead the workers into another trap. Eventually prices must take a downward turn. If wages are unfrozen they, too, must take a downward turn. If trade union leaders want high real wages in this country they should not ask for higher gross wages now. I see that the right honorable member for Barton (Dr. Evatt), who advocates the unfreezing of wages, is now in the chamber. If he continues to press that demand he will be guilty of leading his supporters into a trap. There is a very good chance that wages will follow prices downwards. It has been shown that real wages have gone up by about 13s. a week and that the C series index figure is only 1.7 per cent, greater than it was. How are we to reach the happy situation of a continually rising overseas income, to which the Leader of the Opposition referred in his speech? We shall achieve it by building up confidence in, and sustaining our rural industries. As I have said, the first casualties have been the poultry and dairying industries, whose costs have been raised to a prohibitive level. No one should know better than the honorable member for Blaxland what is going on. His engine-drivers are pushing worn-out engines over the mountains because of the failure to re-invest in new transport equipment.

This Government has done as much as if. possibly can to foster the dairying industry, but it must watch what is happening overseas. Therefore, it has said that there will be a guaranteed price for dairy products. As from the beginning of this financial year the dairy-farmer has received a price that will not be subject to violent fluctuations. The price itself is determined, first, by the amount of money paid within Australia and, secondly, by the amount received from outside this country- The volume of our exports, and the price received overseas, are both very important. May I repeat that, in a little more than twelve months, the price of butter overseas has fallen from -410s. per cwt. to 322s. Fortunately, it has remained firm at that figure. It has fallen by 9 id. sterling per lb., or almost Is. Australian per lb. I think that, after all costs and charges are paid, the price received in this country is about 290s. per cwt. or less than 2s. 1Od. per lb. As the Minister has said, that is up to 2s. per lb. less than the guaranteed price. It all has an effect upon the return to the farmer. As I have said, the farmer received in July only 3s. 4d. per lb., though in June he had received 3s. 8d. per lb. This was caused almost entirely by the fall in the price overseas. Those who have said that it was caused by a withdrawal of subsidy have made a serious mistake. They have forgotten that the subsidy fell by only a very small amount, and that there has been an increase of the price of butter. The sum of £14,500,000 was given to the industry, which had already been subsidized to the extent of about £100,000,000, in order to keep down the cost of production and the C series index figure. It gave the working man butter at a lower price than obtained in any other part of the world. The Government was also seeking to give to the industry long-term stability. It decided that employees in rural industries need not participate in national service, but could remain on the farms. It has also permitted farmers to re-invest all their profits in their farms. That means that, after living costs have been taken out, all the farmer’s profit may be put back into the farm and be spent on such things as dam sinking, pasture improvement, fencing and so on.

The Government has done a. great deal for the dairying industry, but it cannot combat the effect of overseas price fluctuations. The effect of the price fall in London cannot be over emphasized. About one-third of our butter goes overseas unguaranteed. The guaranteed price applies to home consumption plus 20 per cent., which is a. little less than 140.000 tons of the yearly output. This year it is expected that another 60,000 tons, or a little less than one-third, of our butter will go overseas to bring whatever price we can get for it. It will have to compete with butter from other countries, and with the subsidized British article.

The price in the United Kingdom is 322s. per cwt. The Australian Dairying Industry Equalization Committee Limited must take many factors into consideration. It may fix a low price in the beginning as it must see what the season brings forth. Numerous factors have a bearing. If production is greater than usual, more butter must be sent overseas. The lower price obtained there must be averaged out with the guaranteed price, which is 49.23d., or about 4s. 2d. per lb., to the farmer. Also, on the l3t July, the equalization committee could not know what consumption would be like, so it decided that 3s. 4d. per lb. would be the temporary figure. I do not wish to be considered over-optimistic when I say that, having examined the present position with caution, I believe that it is not too bad. I have been in touch with the manager of the Producers Distributing Society Proprietary Limited this morning. That organization sells the bulk of the butter in the eastern States. It sells most of the butter and practically all the cheese in Sydney. The manager told me that consumption had not fallen at all. The position appears to be very good at home. The position, in London is no worse, because Russia and West Germany are buying. The Europeans want to get butter for the approaching winter period, so there is a firm price in London of 322s. per cwt. Because of that I again ask the Government and the Minister to confer with the Dairying Industry Equalization Committee, and to endeavour to have the price raised above the first interim price of 3s. 4d. per lb. I believe it is within the Minister’s power to confer with that committee, and that the Government has some influence because of the subsidy. It may be possible to raise the August price and the September price a little. Conditions do not appear to be as bad as previously, so that we can pass on to the industry the benefits of this slightly more buoyant situation overseas. When we establish stability and confidence in the industry, the farmers will have an incentive to go ahead and produce this very precious rural income, which is so important to the Opposition. Honorable members on the other side will not face the fact that the rural export income is important to their supporters, who have a vital interest in goods that are brought into Australia, such as fuel, machinery and other materials which are used in the industries in which they are employed.

This morning, I conferred with the honorable member for McMillan (Mr. Brown), the honorable member for Corangamite (Mr. Mackinnon), the honorable member for Flinders (Mr. Lindsay), the honorable member for Lyne (Mr. Lucock), the honorable member for Farrer (Mr. Fairbairn), the honorable member for Lawson (Mr. Failes) and the honorable member for Paterson (Mr. Fairhall), who are members of our Food and Agriculture Committee. We gave a great deal of thought to this problem, and discussed it at length. The honorable member for Forrest (Mr. Freeth) has been supporting us, and other dairy-farmer members are vitally concerned. We believe that the Government has done its best for the dairying industry. We believe that over a period of five years it has brought a new way of life to the farmers, and has improved conditions in the industry. We have been watching the position closely. We know that there are still some unknowns, but we say to the industry that we will attend to the problem steadfastly and devotedly in order to ensure that the conditions established by this Government are held. In other words, we will help this industry to maintain its position in relation to all other industries. The long-term stability of the industry is assured if those engaged in it will realize that prices have fallen overseas, and if the rest of the community will co-operate with it, and if the supporters of honorable members opposite do not make it too difficult as regards freights, costs and various other charges, the impact of which is being felt more in this industry than in most others. We hope that the supporters of honorable members opposite will not make it too difficult for the people who have to compete in the oversea= markets. The dairying industry has made a real contribution to the welfare of the Australian community. It has supplied cheap food of high quality over the years. It has tried to keep the C series index down. It has provided the food for the breakfast table of Australia, and so has helped to produce a nation of men and women who are enterprising and vigorous, and who have maintained a place in history. At the same time I do not want to forget the poultry industry.

Mr Hamilton:

– I direct the honorable member’s attention to the fact that the conversation which is going on at the table can be heard above his remarks.


– I have been told that people at the table are trying to beat me. That is a contemptible and grossly disorderly thing to do. I was referring to the poultry industry, and I ask honorable members to try to realize the difficulties of these industries which are making a contribution to Australia’s economy by assisting to adjust the balance of payments. We should realize that it is advisable to keep down the costs of the things that they buy. I refer to such goods as meatmeal and breadstuff offal. The latter commodity now costs £24 a ton, because flour has to meet overseas competition. We should also try to reduce the cost of freight and of new equipment that the farmers have to buy in order to continue production. The farmers in these important industries have to meet the costs of those items, besides paying high prices for labour and being forced to introduce new techniques. We should therefore try to assist them, because every member of the community has an interest in trying to keep the costs down. The speeches of the right honorable member for Barton (Dr. Evatt) and of other honorable members opposite were in support of policies that would have the effect of increasing costs, but those honorable members should be realistic. I think that the members of the Anti-Communist Labour party recognize the seriousness of the problem. I have heard speeches by the honorable member for Yarra (Mr. Keon)-


– Order ! The honorable member’s time has expired.

Mr. .- FITZGERALD (Phillip) [2.30].- We have just heard the usual talk from a Government member who despises Labour men and workers generally. We recognize the problems of the rural industry.

It would be as well for members of the Australian Country party and other supporters of the Government to consider those problems, particularly those of the dairy-farmers, and to recognize that this nation will never progress unless we appreciate the value of the men and women in our community, and try to act in a decent manner towards them. We are assembled here to deal with the budget, which is the yearly account of the Treasurer to the people of Australia of how he has spent their money. I should like Government supporters to realize that the money does belong to the people of Australia, and that very few of those people are happy with the way in which it has been spent. The criticism of the budget which ha» appeared in the press is well known, and such adjectives as “ dismal “, ‘’ callous “, “ disappointing “, “ staggering “, “ lamentable “, “ hopeless “, “ niggardly “ and “ arrogant “ appear in the headlines in our newspapers. When on the 21st July this year the Treasurer (Sir Arthur Fadden) advised the people of Australia that he had a surplus of some £70,200,000, it was to be expected that the people would ask how they were going to fare. When the Treasurer brought down his new budget last year, he estimated that the surplus would be a mere £250,000. Is it not understandable that the people are not satisfied? Just imagine a Treasurer budgeting for a surplus of £250,000, and then finding himself with a surplus of £70,000,000 odd!

Let us now consider how the money is to be spent. This year again, over £1,000,000,000 will be raised, and we ask: Is it necessary? How is it to be spent? These are the major questions to be considered in this debate. Members on this side of the House believe that distribution of the nation’s wealth gives too much to the wealthy class and too little to the workers, who are finding it every day more difficult to live. It is all very well for the honorable member for Macarthur (Mr. Jeff Bate) to talk glibly about what the workers are receiving, but if he tried to live on their wages he would be more realistic in his attitude. The white paper which accompanied the budget, and which refers to national income and expenditure, shows where the money goes under this Government. Eighty-five per cent, of the people, who receive wages or salaries or who are members of the Defence Forces, receive 57 per cent, of the national income, while the other 15 per cent., many of whom also receive wages and salaries, take 43 per cent, of the national income. That is the issue in this budget, and on that the Government must be judged.


– Who wrote this speech ?


– If honorable members look at the White Paper on National Expenditure they will find the figures to which I have referred. I repeat that the fact that 85 per cent, of the people received 57 per cent, whilst 15 per cent, of the people received 43 per cent, of the national income is indicative of the inequality that operates to-day between the two sections of society in this country. We of the Labour party say that a more equitable basis should exist. With that in mind, we are asking the Government to consider the views expressed by honorable members on this side of the committee.

Company profits have reached an alltime record. Yet, the Government has consistently refused to take action to stop this wholesale robbery of the Australian people. We all know of the huge profits that have been made by General Motors-Holden’s Limited, the Broken Hill Proprietary Company Limited, and other great organizations whose balance-sheets are being produced almost daily. On Tuesday night last, the Leader of the Opposition (Dr. Evatt), in his careful and critical analysis of the budget, showed that company profits had increased in the last two years from £378,000,000 to £505,000,000, an increase of more than 33 per cent. He also pointed out that should a similar rate of increase operate this year as operated last year, the figure would rise to £542,000,000. Although company profits have increased to such an extent, honorable members opposite want to know what has caused this great inflation. In the same period, allowances for depreciation increased by £100,000,000, or by 50 per cent. Undistributed profits increased from £101,000,000 to £137,000,000, an increase of £86,000,000, and so on. In addition to the huge increase of company profits during the last two years, there have been great increases in undisclosed profits.

Mr Hamilton:

– Would the honorable member treat this matter in the same way as would the honorable member for Hindmarsh (Mr. Clyde Cameron) ?


– I should treat companies in the way that the ordinary workers, the people who are in need ai the present moment, are being treated by this Government. We of the Labour party believe in a more equitable distribution of the nation’s wealth, the wealth which is produced by the people. Is it to be wondered that there are protests? The people rightly ask, “ How are the custodians of our money looking after us?” The Treasurer (Sir Arthur Fadden) has rebuked them regarding hire purchase. I say, as a family man with a wife and four children, that I know some of the circumstances that operate in that connexion, and I know that the workers could not clothe their children or furnish their homes if it were not for hire purchase. Those are the pecuniary conditions in which the workers of Australia find themselves at the moment.

When honorable members opposite ask us what we would do about the huge profits that are being made by companies, our reply is that we would give a proper livelihood and a decent existence to the unfortunate people who are suffering the effects of inflation. I contend that the members of the Government parties, with all their wealth, cannot understand this problem. If they wish to help the people who are in need, let them advocate the granting of small loans. J do not agree that huge time-payment firms should batten on the workers because of the unfortunate conditions in which they find themselves, hut I do say that the small loans section of the Commonwealth Bank could bring to an end exploitation of the people by hire-purchase companies. This Government will not help in that direction, because such companies represent one of the mainsprings of the Government parties. The people are entitled to know why, after the announcement that there would be a surplus of approximately £70,000,000 this year, subsidies of tea, butter and other important commodities were withdrawn. We have been told that trips abroad by Ministers have cost more than £70,000. Apparently, some of those journeys were for health reasons, and others were made so that those undertaking them could see their daughters married.

What has happened to the annual £200,000,000 defence vote during the last five years ? Why was the honorable member for Mackellar (Mr. Wentworth) silenced on civil defence? Has all this war talk during the last five years been humbug? Of course it has! Although certain Government backbenchers were most eager to do something about civil defence, they were stopped by the power of the party machine and by pressure exerted by the high-ranking members of the Government. Why is the huge sum of £23,000,000 to be expended on a defence project at St. Mary’s ? Who are the contractors who are to be given the work, and the shareholders of the companies concerned? These are matters which the people are eager to know about. The honorable member for Maribyrnong (Mr. Drakeford) has pointed out that, to-day, the most modern defence plant in the southern hemisphere is not producing one pennyworth of defence equipment. Nevertheless, £23,000,000 is to be spent at St. Mary’s. It is significant that that decision was made on the eve of the defence allocation. As I say, it is important for us to know the identity of the contractors who are to receive these fabulous contracts from the Government.

Not very far distant from my own electorate, £677,000 has been spent on the erection of houses for personnel of the Navy at South Head, again just on the eve of the defence allocation. I should say that South Head is the most vulnerable spot in Australia. It could be blasted by enemy craft standing miles off-shore. Nevertheless, this huge amount has been spent there. As the Leader of the Opposition stated on Tuesday night, this £2.00,000,000 defence vote needs to be looked at, as well as the huge surpluses which the Government produces year after year. The training camps to which our boys are being sent are a disgrace. In this respect, I speak as a father whose lad has just returned from camp at Singleton. Three hundred boys from his school went there, and all of them suffered from dysentery. That is a disgrace. It may be argued that, after the floods, conditions in that camp would be beyond the control of the Minister for the Army (Mr. Francis) and the Department of the Army, but I contend that boys should not be sent to such places. Again I ask, “ What has been done with this £200,000,000 that has been voted each year for the last five years? “ What aircraft have we? Where are our battleships and our long-range weapons? These are matters which the people arc entitled to know.

What has been done to oppose overseas shipping interests in their proposal to increase freight rates? They could, by means of such a proposal, cripple and perhaps destroy our export markets. Yet, the members of the Australian Country party stand by and make no protest in the matter. I suggest they are Ellen i because they are controlled by these same shipping interests. I hope to show in a few moments exactly how this Government, too, has been throttled for a considerable period by these self-same shipping interests. Yet, honorable members opposite come into this Parliament and speak glibly of the great fight they are putting up and the objections they have raised concerning the proposal to increase freight rates. As the supporters of the Government know perfectly well, the Peninsular and Oriental company, that great octopus, controls Australian National Airways Proprietary Limited. Was it not this Government which recently granted £3,000,000 to Australian National Airways Proprietary Limited, in an attempt to submerge Trans- Australia Airlines? Despite that, we frequently hear pronouncements concerning the great fight that the Government proposes to put up against these monopolistic shipping interests. I suggest that the Government is powerless to intrude in the matter because it recognizes that this mighty octopus, the Peninsular and Oriental company, has a stranglehold on it. If the Government had courage and backbone, it would take the same course as that taken by India. As honorable members may remember, the Prime

Minister of India, Mr. Nehru, threatened the overseas shipping interests that if they increased freight rates in such a way as to nullify the efforts of the people of India, his Government would take action. If our Prime Minister (Mr. Menzies) had showed the same courage and initiative, we would be in much happier circumstances than exist to-day. This fight against a monopoly which can crush us has not been handled in our best interests by the Government and those who control our nation. Our Commonwealth ships were hawked around the world for disposal and, while offers were made for their purchase, fortunately for us those offers were not accepted by the Government. We should be entering into competition with the overseas shipping interests, challenging them, and meeting their threat to cripple the overseas trade of this great nation.

Honorable members on this side of the chamber assert that the Government’s failure to curb inflation is bringing into disrepute all State governments. During the last few days we have read in the newspapers of protests being launched in Melbourne, and mass demonstrations taking place, in regard to rent increases and higher hospital charges in that city. It is a disgrace that such conditions should operate, when this Government exercises so much influence financially throughout the length and breadth of the country. Protests are being made in every State, but the Government is doing nothing to assist the State governments. All democratic governments are being brought into disrepute. In Victoria the cost of homes is to increase by 30 per cent, because of the difficulties being encountered as the result of this Government’s failure to fight and destroy inflation. Costs are out of all proportion. Since the Government took office some items have trebled and others have quadrupled in cost. Government supporters take pride in saying that the Government is giving so much to pensioners and so much to somebody else, but prices have advanced out of all proportion to increases of social services benefits. Let us consider the price of vegetables. In Sydney, cabbages and cauliflowers, were selling recently at 9s. each, and at present they range from 3s. to 4s. Potatoes sell at Is. per lb., and clothing prices are beyond the reach of pensioners and men with large families. Shoes cost £4 a pair. It is difficult to get any pair of shoes, let alone a decent pair, at a lower price. Honorable members opposite think that it is magnificent that a paltry increase is to be handed out to the unfortunate pensioners. One has only to contrast the steep rises in the prices of basic commodities to see how ungenerous the Government is in this matter. The tea subsidy has been reduced, and as a result the price of tea has increased from 2s. 7d. to 6s. 3d. per lb. Bread costs Is. a loaf, and milk, which not so many years ago cost 4d. a pint, now costs lid. a pint. Meat prices are fantastically high. It is impossible for people in the lower income group to meet these high costs.

We ask that the surplus funds be used to give assistance to family men, the aged and infirm,, war and civilian widows,, and particularly those with children. I stand very solidly behind the members of the War Widows Guild of Australia in its appeal to every member of the Parliament to honour the promises made to their husbands prior to enlistment. The committee of ex-servicemen of the Government parties should heed the words of the president of the guild, who writes -

On the shoulders of all those who survived and have prospered rests a debt of honour to the Australian war dead which no talk of budgets or claims of this and that group can possibly disguise. Full compensation for their families was promised to all who died in the service of their country, but the dead soldierhusbands have been classified only as “ medical disabilities “, and compensation has not been given to their widows as trustees for men who are totally and permanently incapacitated to support their families.

I ask the Government to heed this appeal. I know that honorable members, of both Government and Opposition parties, have received sheafs of such appeals from people in their electorates, and I hope that, even at this late hour, those appeals will not fall on deaf ears. I hope that the Government will recognize its responsibility to aid these unfortunate people. Widows with children are in a most unhappy situation. They are on the verge of starvation, despite the great wealth that exists in this country, and something should be done for them. I urge that they be given more assistance.

The fight against inflation demands the co-operation of all sections of the community. The trade union movement will unite with other sections if the Government is prepared to smash the profiteering which prevails at present. If the Government wants co-operation, it must assist people who are in dire need, those with large families, and the workers generally. Government supporters must realize that many families are forced to lead a handtomouth existence unless both mother and father are employed. If there existed on their behalf a committee which functioned as effectively as that which will determine the salary that honorable members receive, the circumstances of people outside the Parliament would not be as unhappy as they are at present. We should smash profiteering. The volume of production has never been greater than it is to-day. Real labour costs, by which I mean the time taken r.o produce commodities, have never been lower. We on this side of the chamber agree that industry should be assisted. We must help industry to obtain the most modern methods of production and the most up-to-date machines.

All the people, instead of merely the wealthy sections, should be allowed to share in the advantages that flow from our prosperity. The State governments should be assisted from the huge surplus funds that belong to the people. Let us have a greatly expanded home-building programme, with industries established to produce bricks, tiles, and other building requirements. Let us assist the State governments to build the necessary hospitals and schools and improve health and education services generally. The conditions in some schools to-day are deplorable. The State governments are not receiving adequate assistance from th« Commonwealth to meet their commitments. It must be remembered that the Australian Government is the main source of revenue for the State governments. It imposes the taxes, and the money that it collects belongs to the people. The people expect assistance to be given to the aged and infirm and to widows, and tha< adequate hospitals and schools be provided. We ask the Government to assist in solving these problems, which are most pressing in all States. I have said that these funds are the people’s money. The people pay their taxes willingly if they receive value in return, but they regard what they are receiving now as totally inadequate. They claim that they artbeing unjustly treated, and we on this side maintain that they have a right t be critical. They want to raise their families under the best possible conditions. They want to see increased provision for aged persons, widows, and recipients of repatriation benefits. Unfortunately, people in these categories will not receive their rightful due under the terms of the budget. It is about time that the Government did something to assist these people who are in need. We have shown exactly what is taking place, and we hope that the plea we make on behalf of all sections of the community will be heeded by the Government.


– One of my colleagues, who has had to leave the chamber, remarked to me before he left that the contribution to the debate made by the honorable member for Phillip (Mr. Fitzgerald) contained so little meat that there was very little to answer in it. I agree, but I do condemn the honorable member’s cheap gibes at the Australian Country party, of which I am a member. I leave his contribution to the debate with that comment, and direct my attention to the dismal dissertation that was given by the Leader of the Opposition (Dr. Evatt) in this chamber last Tuesday. Most of hi3 speech consisted of generalities and he spoke of carbohydrates, fats, vitamins, and iron. He waxed eloquent on those matters, but I found that he became less effusive when he referred to defence. That is typical of the approach of the right honorable gentleman to anything relating to the defence of Australia. Honorable members will recall that he is running true to form. All of us remember the Manus Island tragedy after World War II., and what happened to our defences while the Labour Government was in office. .The Leader of the Opposition did not make any practical contributions towards a solution of the problems that face Australia. Those problems were outlined by the Treasurer (Sir Arthur Fadden), and they are very grave. The honorable member for Melbourne (Mr. Calwell) spoke in his usual style about inflation, and charged the Government with failing to control the inflationary trend and put value back into the £1. I remind the people of Australia that, when this Government was elected to office in 1949, it set out to grapple with the problem of inflation. A warning against inflation had been given by the former Labour Prime Minister, Mr. Chifley, who stated publicly that any government that gained office in Australia would have to introduce unpopular measures and drastic legislation. Statistics show that the greatest percentage increase in inflation took place between 1947 and 1952. Why was the problem not tackled until 1952? All honorable members know the reason. It was because a hostile Senate refused to give this Government the power to deal with inflation. That is the answer to the honorable member for Melbourne.

In 1951, the present Treasurer introduced a budget which was criticized all over the country as the “ horror budget “, but I believe the people of Australia recognize its value now. In his budget speech last week, the Treasurer said -

It has repeatedly been said that our central pre-occupation in Australia should be the level of costs in our industries. That view is unquestionably right. As a nation in the world economy we advance or fall behind according to the degree of our competitive power. Let us, therefore* pause to note a highly significant fact - during recent times, when our level of costs has started to rise again, costs and prices in many of the major countries abroad have been stable and, in some cases, they have even been tending to fall.

That is a true analysis of the position m a few words, and I wish to deal with that aspect of costs, particularly as it affects the primary industries of Australia which are responsible for practically 90 per cent, of our overseas credit. I direct the attention of honorable members in particular to the wool industry. Honorable members will know that during the last few days, there has been a marked fall in the price of wool. That trend has been apparent since 1952, and 60 per cent, of our export income is derived from wool. As a result of the gradual fall in prices, to-day the rates are about 30 per cent, down on the prices of 1952. In my electorate of Maranoa alone, that fall of 30 per cent, means a drop in income of approximately £12,000,000 to £13,000,000 on a twelve months’ clip.

Our export income from practically every other primary product is falling. If that trend continues, where shall we get the money to pay for the goods and services that Australia requires? It has been said that the revenue we earn from the export of primary products is our housekeeping money. If it is reduced, we shall have less money to spend, and costs will increase because there will be greater competition. I warn the Leader of the Opposition and the people of Australia that our standard of living is gravely threatened. If primary industries are not prosperous,’ the country becomes poor. The prosperity of any nation is gauged by its primary industries. The wool industry is vitally affected by the recent fall in prices, but few people seem to be conscious of the fact that the whole of the Australian economy is based at present on wool. Australia, and, indeed, the British Commonwealth of Nations, are riding on the sheep’s back. In the wool industry, prices are falling desperately close to the cost of production, and we cannot afford to allow the situation to drift any farther.

How can we rectify this problem of high costs? I pause here to remind honorable members that most of the costs affecting primary industries are out of the control of the primary producers. There is only one way to control the situation. Everybody must do more work, produce more and reduce costs.

Mr Cope:

– What about the profits?

Mr. BRIMBLECOMBE Profits for whom.? There are no profits in this industry to-day. I know that the grazing industry and most of the other primary industries have had a pretty good trot for the past few years, but I, as a primary producer, know that I had to wait many years before I got a break in my industry.

Perhaps some people will ask, “ “Why do not you become more efficient in your industry ? “ Nobody knows better than the primary producer the value of efficiency in primary industry, but it is time that politicians, would-be economists and all kinds of know-alls got off the primary producer’s back and stopped telling him that he should be more efficient. None of them is game enough to go out into the country and tell the primary producer how he can become more efficient. Let the secondary industries put their machines to work and do a bit more. Let them reduce their costs, and export more. That is all that I want to say about that matter.

The honorable member for MacArthur (Mr. Jeff Bate) gave a long explanation of the position of the dairying industry. Subsidies have been mentioned in this debate. Perhaps somebody can tell me why it always happens that, when there is any reduction of the subsidies paid on any commodities or in respect of any services, it is the primary producer who has to take the first bump. I think he is just as worthy of consideration as any other citizens in the community. I am not going to argue that subsidies are entirely right, but, as we have adopted a system of subsidies in the national economy, I should like to know why, when subsidies paid to primary industries are being reduced, those paid to secondary industries and the workers are being maintained at their present level, and in some instances are being increased. Let me explain what I mean by that statement. Customs duties are really subsidies to protect the workers and the secondary industries. That kind of subsidy has not -been reduced or interfered with, but the subsidies paid to the primary industries, which produce the real wealth of the country, have been reduced. I should like somebody to try to explain away that one. I feel that, as we have adopted the principle of subsidies, the primary producers should be in the same position in that regard as any other section of the community.

I congratulate the honorable member for Batman (Mr. Bird) on the address that he delivered on the roads problem. It was a valuable contribution to the debate. It is the only practical contribution that has come from the Opposition side so far. I recommend that the Government give serious consideration to the honorable member’s proposition. Like him, I have tried to study the roads problem. I believe that, until we develop our roads system adequately, we shall never get proper national development. Because of the inefficiency of the roads system, transport is one of our most serious bottlenecks. I believe that one of the reasons why there has been a lag in roadbuilding is that the State governments have never faced up to the problem in the way in which they should do so. They have held back on road construction in order to try to bolster their bankrupt railways. That attitude must be discarded and we must face up to the problem in a practical way.

I agree with the honorable member for Batman that we should be attempting to do something practical to develop our roads. The Commonwealth should be more concerned with the construction of roads. There is precedent for that. We know that, as a part of a beef production promotion scheme, roads are being developed in the Channel country. This Government, since it has been in office, has made available over £1,000,000 for the building of roads in the Channel country and in Western Australia. Those roads have been a wonderful boon to people in the far-back areas. Some of the roads concerned are in my electorate, which takes in the southern part of the Channel country. Since those roads were built, a great many more cattle have been brought to the railheads at Cunnamulla, Quilpie and the Yaraka end of the Blackall line. The number of stock carried to the railheads by road transport has increased enormously. I know that between 4,000 and 5,000 head of cattle were delivered to the Cunnamulla railhead last year from places within a radius of 100 miles. The roads are of great benefit to the people in those areas.

It has been stated that we must face the fact that we shall need to build heavier and stronger roads. I agree that, if we continue to use the present type of heavy road transport, we shall have to build heavier and stronger roads, but I believe there is another solution of the problem. If any honorable member likes to take the trouble to do so, he can obtain a copy of a report issued by the Le Tourneau Corporation of America. The report deals with the corporation’s experiments’ with vehicles fitted with low-pressure tyres. Let me read an extract from the document. It is as follows : -

Sir. R. G. Le Tourneau of America recently published some results of transport investigations and its effect on roads, and his conclusions re road transport and future trends stressed that loads did not matter if carried on large low-pressure tyres at a reasonable speed. He suggested tyres of at least 48” to 60”, and larger if required. These tyres would operate with 10 lbs. air pressure and could be. loaded to 3 to 4 tons per tyre at a speed of 15 miles an hour. Such tyres and loa’* at that speed would not damage lightly constructed roads. Thus a vehicle so equipped with eight tyres could carry from 24 to 30 tons, as against 10 tons for a vehicle equipped with eight 1 100 x 20 high-pressure tyres. Result, cheaper roads, bigger loads, decreased repair and depreciation costs on vehicles, as with slower running, vehicles would last longer.

The Americans are finding out that, with fast traffic and high-pressure tyres, even their cement roads are not standing up to the strain. Experts are closely examining the question whether low-pressure tyres should be used. I have specifications and photographs of the latest deisel-electric road train built in America. It was constructed for the American Army. According to the latest reports that I have, this road train is giving excellent results. I suggest that the Government make some investigation into that matter. I believe that the diesel-electric road train could solve our transport problem in the far western areas. Anybody who understands how road trains are operated will agree with me. Up to date, the carriage of stock by road transport in the west has not been altogether successful. It has been demonstrated that cattle carried to a railhead by road will kill a lot better in weight, but that the cattle, when they get to the meat-works, are not in good condition. The beef is damaged by bruising and in other ways which offsets the weight advantage. With dieselelectric road trains, which can carry up to 2.00 bullocks, the bruising is eliminated by nearly 100 per cent, for the simple reason that there is no jerking or bumping as there is in ordinary road transport. [12]

Those who have had experience of road transport, particularly in the far western areas, will know what I am talking about. The building of roads is a serious matter and I support the proposition put. forward by the honorable member for Batman that the Australian Government should further investigate this problem. All sorts of meetings and conferences have been held. My colleague, the honorable member for Canning (Mr. Hamilton) has attended quite a few, but they do not seem to get very far. This problem should be taken very seriously and State governments should approach it from the angle of discarding the idea that railways are the only form of transport.

Another matter I desire to speak about is soldier settlement in Queensland. This subject is a hardy annual.. I congratulate the Government on again making a substantial amount of money available for soldier settlement, but I condemn the Queensland Government for not accepting; the last offer made to it by this Government and for not accelerating soldier settlement in that State. It is a disgrace to the Queensland Government that these boys have been let down so very badly. The solemn promise made to them has been dishonored, to the everlasting shame of that Government. From the way the matter has been handled in Queensland, I do not think the grandchildren of these soldiers will be alive to receive the benefits of soldier settlement. It is a damning indictment against the Queensland Government and I ask the Minister in charge of this matter to prepare a statement of the whole history of soldier settlement in Queensland and also to make another approach to the State Government to see if something cannot be done about it.

Recently at Dalby, in Queensland, the State Minister for Lands accused the Australian Government of making only a niggardly allocation of money for soldier settlement in Queensland. During his address he said that the Queensland Government had allocated £10,000,000 and that the only contribution made by the Australian Government was approximately £400,000. He. said, “You can draw your own conclusions “ ; and he left it at that. Coming from a Minister of the Crown, that is not a fair analysis of the position; and he knows it. Every Australian Government that has undertaken to assist soldier settlement has done a good job. The agreement was drawn up by the Curtin Government and that Government honoured its obligation to the soldiers; so did the Chifley Government and so has this Government. Those three governments have honoured their agreements on this matter. Yet the Minister for Lands in Queensland accuses this Government of not doing its job. I ask that this matter be further investigated and that something be done quickly to give these boys, who desire to go on the land, the opportunity which is their right.

In conclusion, I repeat that I wholeheartedly support the budget. Like the Treasurer, I believe it is a holding budget, designed to hold the prosperity that we enjoy to-day. I believe we can hold that prosperity if each and every one of us - I am not singling out any particular section of the community - faces up to the realities of the problems which confront us and, as I said before, does a little bit more work. In that way our prosperity can be maintained and increased.


.- The budget that we are discussing has been described in various terms - a “ sit- tight “, a “ standstill “, and a “ stay-put “ budget. The term “ stay-put “ reminds me of the very dramatic character who captured the imagination of the world a few years ago. However, I remind those people who have used that term that eventually “ Captain Stayput “ had to give up hi3 ship, and I am certain that the same fate will face the Treasurer (Sir Arthur Fadden) as a result of this “ stay-put “ budget.

The Treasurer said - it is a real and genuine prosperity. We bemoan our living costs, our lack of amenities and refinements but is there in fact any country with higher general living standards or greater opportunities for a secure and spacious life than ours?

That is the type of sophism that is used day after day in this chamber by members of the Government when it suits their purposes. It is a half-truth, and many people will not be deceived by it. I refer, first of all, to the 350,000 pensioners in Australia, 70 per cent, of whom depend entirely upon their pensions for subsistence. I refer also to those families who have to struggle week after week, the wage slaves. Many people will disagree with those sentiments. Although many things in Australia are worth defending and dying for, there are quite a number which one is not proud of. This sophism of trying to put ourselves in an entirely different category from other countries is, to my mind, misleading. I refer, first of all, to the United States of America as compared with Australia. In contrasting the two countries, the position of the skilled worker in America is definitely superior to that of the skilled worker in Australia. On the other hand, the position of the unskilled worker in Australia is definitely superior to that of the unskilled worker in America. In making the contrast, one brings to mind the automobile industry, in which General MotorsHolden’s Limited has made an extraordinary profit over the last twelve months. It is interesting to contrast the conditions and wages of employees of that company in America with those of its employees in Australia. One would imagine that a company with such capacity and potential, so far as profit is concerned, would certainly give a lead in the’ treatment of its employees. But I regret to say that General Motors-Holden’s Limited in Australia has not exhibited any distinguishing trait in its dealings with the workers. It is true that that company has observed award wages and conditions, but the profits that it has made should have enabled it to extend better and more generous treatment to its employees. The honorable member for Maranoa (Mr. Brimblecombe), in an attempt to defend the deflationary trend between 1950 and 1952, stated that, due to the existence of a hostile Senate the Government could do nothing to combat that tendency. This is the first time in the five years that I have been a member of this chamber that I have ever heard such a defence raised on behalf of the Government. During the period I have mentioned we went through an inflationary stage and the Government had every facility to deal with it, had it desired to do so. Those people who throw out this bogy now so late in the day - the existence of an alleged hostile Senate - would be on firmer ground if they could point to any measure that the Senate had rejected rather than rely on generalizations. I submit, in the light of the circumstances of the history of the last five years, that it is rather odd and late in the day to make such a reference to the Senate.

I believe that the budgetary proposals that are before the committee should be opposed, because the Government has failed to deal properly with social services. More liberal increases could have been proposed for both civil and war pensioners. The Government deserves criticism for its failure to liberalize child endowment. Furthermore, the amount of the funeral benefit for pensioners could quite easily be increased. T remind the committee that a Labour government introduced the funeral benefit of £10 about ten years ago, and it has not since been increased. Every one knows that to-day the cost of dying equals almost the cost of living, yet the funeral benefit remains at the figure that was fixed ten years ago. In view of the state of the economy, it was quite within the competence of the Government to increase the amount of the benefit.

Some days ago my colleague, the honorable member for Cook (Mr. Cope) asked the Prime Minister (Mr. Menzies) at question time whether the Government would favorably consider the making of a Christmas grant to pensioners. The right honorable gentleman refused the request. Of course, this is not the first time that such a request has been made, but it has always been refused by this Government. I remind the committee that in making such a request, honorable members cm this side are not asking for something original or unique. Such a grant is made by the Dominion of Sow Zealand. Furthermore, the rate of pension for both age and invalid pensioners in that country is £4 13s. a week, compared with the proposed rate of £4 a week in Australia. The Government could quite easily have acceded to the request of the honorable member for Cook to make a special Christmas grant to pensioners.

Mr GEORGE Lawson:

– The Lyons Government made such a grant.


– As my colleague, the honorable member for Brisbane (Mr. George Lawson), reminds me, such a grant was made some years ago, by the Lyons Government.

I consider that the Government is deserving of criticism also for its failure to reduce direct taxation and sales tax. One of the most extraordinary features of budgets that have been brought down in this Parliament during the last three or four years has been the inaccuracy of the supporting Estimates. It is both dangerous and bad for a Treasurer to frame a budget unless he is capable of estimating with a reasonable degree of accuracy. At the end of each of the last three or four financial years it has been revealed that the Estimates that had been presented to the Parliament twelve months previously were completely astray. Last year, for instance, they were astray to the extent of £70,000,000. Such a considerable margin compels one to ask why such a serious discrepancy occurred. A fluctuation of from £10,000,000 to £15,000,000 either way is understandable, but no extraordinary circumstances arose last year that could not have been foreseen. Yet the Treasurer finished the financial year with a surplus of £70,000,000. That constitutes an indictment not only of the Treasurer, but of the Government as a whole, because when the Treasurer brought down the budget for 1954-55 he stated that he had budgeted for a surplus of from £14,000,000 to £15,000,000. At that time, many of the requests that were made by honorable members on this side of the committee for increases of social services benefits were rejected on the ground that sufficient money would not be available for the purpose. It is now evident that had the Treasurer been more generous twelve months ago, he could have increased social services benefits by at least £1 a week and still finished the financial year with a surplus of about £40,000,000. This recurring discrepancy in annual budgets during the last three or four years is a matter that should engage the attention of tho committee.

Although the budget now under consideration provides for a surplus of £170,000, actually there should be a surplus of about £48,000,000, which amount will be paid into a special fund to be established for the purpose, thus leaving only an estimated surplus of about £170,000. However, in the light of past experience of the Treasurer’s figures, I should not be surprised if there were a surplus of about £25,000,000 at the end of the financial year. As I have already pointed out, the Treasurer’s estimates in support of previous budgets have been completely astray. For example, in 1953-54, there was a surplus of £15,000,000, which was not budgeted for; in 1954-55, there was a surplus of £70,000,000, although a surplus of only £15,000,000 had been “budgeted for. The failure of the Treasurer to estimate with u reasonable degree cf accuracy has resulted in his presentation of misleading budgets.

The Government is deserving of criticism for its failure to reduce the defence vote, in view of the improvement in the international situation. One can understand the Government being seized with the importance of providing adequately for the defence of Australia, but as honorable members are aware, during the last three or four years it has failed to expend on defence all of the defence votes, despite the fact that it has been noticeable with the approach of the end of each succeeding financial year that there has been intensified and inflationary activity by the defence departments in an effort to expend their votes. It is true that this budget proposes a defence vote £10,000,000 less than the vote for that purpose last year. However, the vote for defence will still stand at £1:90,000,000, and not more than that amount has been expended on defence in any of the last three years. Therefore, if the whole of the proposed vote £or defence this year is expended, in effect, the defence expenditure in this ‘financial year -will be approximately equal to that in each of the last three years. The international situation justifies a reduction of the defence vote. Within the last six or twelve months? almost every other country has moved to reduce its defence liability, but Australia has budgeted to spend as much this year as in each of the last .three years. The Government could reduce the defence vote without reducing total expenditure. The money saved on defence could be used to better advantage by making larger grants to the States to enable them to meet their commitments. Much of the criticism levelled against State governments in relation to roads, for instance, would cease to have any foundation if the States had more revenue.

One of the major factors tending to keep State governments bankrupt is the loss sustained on transport systems. Although members of the Australian Country party are critical of State governments in this matter, I remind them that many country railway lines are regarded as necessary, although operated at a loss.

The Australian Government could help the State governments with their housing problems by making more funds available to them. A few months ago, at the Premiers conference the Premier of New South Wales asked for £70,000,000 to meet the cost of his housing programme, but he received only £12,000,000. As a consequence, the New South Wales housing programme has to be drastically reduced. The position is much the same in the other States. Would it not be more in keeping with the times if, instead of spending money on defence, which is not warranted by the circumstances, the Government were to maintain the scale of expenditure provided in the budget, but apply the money to help the States solve some of their urgent problems?

An alarming aspect of the budget, which many Government supporters have sidestepped, relates to the overseas trading position of Australia. Last year, the budget disclosed a deficit of £142,000,000. That was brought about primarily by the fact that Australia imported £184,000,000. worth more of goods than in the previous year. Basically, the position is that Australia had an overseas trading deficit of £142,000,000, and our reserves have been substantially reduced. The Government cannot allow this position to drift. If it does, Australia will find itself facing an economic crisis similar to that of 1952.

The Government ‘has .stated its .firm determination to hove nothing to do with controls. However, although it criticizes other governments which are trying, by means of controls, to arrest inflationary tendencies for which they are not responsible, this Government apparently has no objection to private enterprise having its own forms of control. It is obvious to everybody that in Australia private enterprise operates its own system of control according to its own standards and canons of conduct. If anybody has any doubt about that I refer him to the report of the committee of inquiry into the timber industry which was conducted recently in Sew South Wales. It is wrong for the Government to stand by and allow private enterprise do as it wishes. It appears that the only motive that appeals to most Government supporters is the profit motive. If an industry is .showing a profit, notwithstanding bow that is achieved, that is its chief justification. The Government cannot escape the responsibility for this state of affairs. In the timber industry inquiry, and in other inquiries also, the fact was revealed that because of the Australian Government’s failure or reluctance to impose controls it had countenanced the exercise of controls by private enterprise.

The Government would like the people to believe that no control is exercised over banking policy. That is the Treasurer’s contention. Who is responsible fox the banking policy of this country? Some one has said that finance is not governed. Are we to accept that bland statement, believe that the Commonwealth Bank Board is applying a policy which this Government does not favour? If that were the case we should soon hear about it. There is not the slightest doubt that the credit restriction policy now being operated by the “banks is in accordance with the banking policy laid .down by this Government. As a consequence of this restriction, particularly in relation to home-building, .home purchase and credit to industry, that government must face its responsibilities. Home-building is being gravely restricted. It is interesting to notice that, according to the figures of the Commonwealth Statistician for the quarter ended the ‘30th March last, the banks had reduced by 15 per cent, the previous ‘quarter’s advances to private enterprise for equipment and plant.

Treasury policy is gravely impeding the development of Australia. Many inland areas are not being developed because Treasury officials will not maintain a continuous flow of money to vital developmental works. The .attitude of the Treasury is to allocate funds for these projects on a year-to-year basis. They are having an impeding effect, particularly in the development of places like’ Darwin. I submit that it is about time that; some government took over this matter and laid down a long-range policy that will permit the development of those centres without any interference by Treasury officials. It is ‘because of that lack of continuity in the policy that flows from the Treasury that the development of our sparsely populated centres hi particular is being hindered.

I wish to make a suggestion to the Government in relation to the lag ‘in the bearing of applications to the Tariff Board. One hears repeated complaints of the delays that occur. I suggest to the Government, first, that it should reduce the waiting period from three months to one month. If any Australian industry applies to the Tariff Boar-d for a revision of any aspect of industry, British interests -that may be affected have to .be notified, (and there is a lag of at least three months before the hearing is cornmenced That period might have been set many years ago when there was no such thing as air travel, but I submit that, in view of recent developments in .communications, the waiting period -of three months could easily be reduced to one month. If my suggestion were followed, it is quite possible that many of .the delays would be eliminated.

Finally, I wish to offer to the Government a suggestion with regard to the arbitration system. The Australian Labour party is committed to conciliation and arbitration. To-day, arbitration is becoming .a very costly business for the trade union movement, and delays in the hearing of applications are cansins; a great deal of discontent. The Chifley Government overhauled the conciliation and arbitration procedure, a»d this Government might well consider another examination of it. I suggest that the first approach to the matter might be to consult the officials of the Australian Council of Trades Unions to see whether it is possible to improve the arbitration machinery, because I am quite certain that the unions have many just causes for complaint. If the Government were to face up to its responsibility, I am sure that it would receive the co-operation of the Australian Council of Trades Unions. I have given my reasons why I believe that this budget has failed. I support the amendment that has been proposed by the Leader of the Opposition (Dr. Evatt).


.- The honorable member for Martin (Mr. O’Connor) has made one of his usually thoughtful and moderate contributions to the debate. He has made various criticisms of the Government, and I propose to refer to his remarks during the course of my speech. I shall not attempt to answer the whole of his speech at the commencement of my comments, but rather I shall deal with it under various headings, which I think may be a more appropriate method and may save time.

May I say at the outset, Mr. Chairman, that I believe that the budget is sound, sensible and realistic, having regard to the economic conditions that prevail in Australia at the present time. The Treasurer (Sir Arthur Fadden) is to be congratulated for having prepared a cautious budget in this period of incipient inflation. He is also to be congratulated for having put principle before political expediency. As we all know, there will be various State elections and a Senate election in Australia within the next six to nine months, and it would have been very easy for a reckless Treasurer - a Treasurer who was prepared to sacrifice principle for political expediency and votes at those elections - to have granted wholesale taxation concessions and other reductions. The right honorable gentleman has not done that. Instead, he has had the courage to face up realistically to the economic problems that confront us, and he has given us a very careful and accurate analysis of those problems.

The honorable member for Martin, who was my predecessor in this debate, remarked that the budget had been variously described. It has been described as a stand-still budget and as a cheerless budget, but I believe that it is by no means a cheerless budget. The Treasurer had the honesty to point out the obstacles to taxation reductions at this time. He had the honesty to stress the various aspects of the economic situation and- the problems with which we are likely to have to grapple in the next twelve months. The budget is by no means cheerless. One need only point to the concessions that have been made under the heading of the National Welfare Fund. Pensions have been increased by up to a limit of 10s. for each member, and repatriation benefits have also been increased. Those sections of the community have much for which to thank the Treasurer. We should consider, not only what this budget provides, but also what other budgets that have been presented by this Government have provided. When we are considering the fact that no taxation concessions have been made by the Treasurer in the current financial year, we must not overlook the fact that, at the present time, taxation rates in Australia are approximately 30 per cent, less thar they were when this Government assumed office in 1949. Of all the countries in the free world, we can boast of having one of the lowest taxation standards. That is something to be proud of. Tt is an achievement that has not nearly been equalled, or attempted to be equalled, by any Labour government.

Mr Cope:

– What about sales tax!


– Sales tax, as the honorable member who has just interjected knows very well, has been reduced substantially by the Treasurer in successive budgets; so, also, have direct taxation and other forms of indirect taxation. The Treasurer has refused to buy votes and he has budgeted, as the honorable member for Martin has correctly stated, for a nominal surplus of only £170,000, which, to my way of thinking, is a correct method of budgeting in this inflationary period. The budget shows that an amount of £48,500,000 will be placed into a special trust account to be called the Loan Consolidation and Investment Reserve. In this time of incipient inflation, I believe, Mr. Chairman, that the Treasurer has acted with prudence and wisdom in so doing. It is necessary, as he has pointed out in his White Paper, to treat inflationary systems early, which is something that the Opposition failed to do in the immediate post-war years when prices were rising. Honorable members opposite have much to say now in criticism of this Government in relation to inflation, but what did the Chifley Government do about inflation when it was in office? Labour was in office for eight years, and during many of those years the inflationary position was getting worse and worse. There was a constant spiral, with costs and wages chasing each other continuously. Although the late Mr. Chifley knew perfectly well what steps should be taken, his party would not allow him to take those steps. We can discount a great deal of the criticism that has been levelled at this Government, because it has really come to grip3 with the problem of inflation, as its record shows.

The Government does not believe in controls. As the honorable member for Martin has pointed out, there must inevitably be some controls, but, as a government, we do not believe in a. policy of controls. It is true that at the present time certain import controls are imposed. As every one must know, those controls are absolutely necessary, but the Treasurer has given an assurance that they are to be regarded as a temporary expedient and that they will be lifted as soon as the situation justifies their removal.

I want to say a word concerning prices control. I notice that some of the States are once again rushing back into this form of control. The Queensland Government has maintained prices control right through. I believe that the whole idea of price control is wrong in time of peace. It operates quite well in time of war with simultaneous controls of other kinds, such as the direction of manpower and the pegging of wages. But those controls are not in being in time of peace, nor do we wish them to be. I stress that, in the view of the Government, price controls are artificial and unnecessary, because they are costly and ineffective and lead inevitably to blackmarketing. They also retard production, and they cannot, in any sense, be regarded as an answer to the problem of rising costs. The most that the price control mechanism can do is register price increases from time to time. I believe - and the Government believes - in the natural law of supply and demand, and the principle of free markets. It is notable that the countries that have the least to do with controls have made the most progress in this respect.

The Treasurer, in his budget speech, referred to hire purchase, and it has also been touched upon by some speakers in this debate. I believe that the control of hire purchase rests with the States primarily, because the hire purchase laws are State laws, not Commonwealth laws; and it also rests with the individual consumer. We have been enjoying a period of unparalleled prosperity for the past few years. Once we got over the economic difficulties of 1951-52, Australia has enjoyed, year by year, a period of prosperity of which many other nations are jealous. I believe that the Treasurer rightly emphasized the need to hold that prosperity, and that is why he has) designed the budget in the way that he has. Hi3 wisdom has already been demonstrated by the fall, a few days ago, in the price of wool. Wool has been our staple export, and the commodity upon which we are most dependent for our prosperity. If there is to be a sustained drop in wool prices, we certainly need to exercise the utmost caution in our economy and finance in the ensuing months. The Treasurer has rightly adopted a cautious approach.

The honorable member for Martin criticized the Government supporters for not speaking more on the subject of our overseas trade balances. I propose to say something on this important matter. We are not, in the words of the honorable member, “ skipping away “ from this subject at all. It is a real problem which the Government is facing in a very straightforward fashion. For a considerable time, the Government has been well aware of the need to- boost- our exports: - to- improve our’ overseas- markets’ with a view to adjusting our overseas trade balances. At present, Australia is in the same position as a man who overdraws on his current account with his bank at the rate of 30 per cent, per annum. So, if we continue on that basis, we shall be bankrupt in a little over three years.

The Government is well aware of the problem and is taking steps, through temporary import controls, to remedy the situation. Of course, that is not the whole remedy. The Treasurer himself has stated that it is only a temporary expedient. May I draw the attention of honorable members to a most illuminating article which appeared in the April-June issue of the Review of the Institute of Public Affairs in Victoria’1. The article carefully analysed the whole of the balance of payments problem and the general conclusion is set out in these words : - . . . the traditional export u£ primary products is no longer, by itself, sufficient to pay for Australia’s, requirements of imports, at its present standard of living and level of employment. This can only mean that if Australia is eventually to dispense with import restrictions and achieve a more or less permanent equilibrium in its overseas trading it must supplement its traditional exports of primary products with increased exports of the manufactured goods now being produced by its enlarged industrial structure. At present Australia is exporting manufactured goods to the value only of about £40,000.000 to £50,000,000 a year, or about 2 per cent., of its total manufacturing output. If we are to pay our way in overseas trade, without the aid of import cuts, this figure would have to be raised to something of the order of £200,000,000 a year - probably more rather than less.

In other words, the experts who have studied this problem say that we shall have to increase our exports of manufactured products from 2 per- cent, at the present time to approximately 8 per cent, or 10 per cent, of our output in order to equalize our overseas trade situation. That provides much food: for thought. I have not time to devote more words to it now, but it is a problem which the Government has well in mind. The honorable member for Martin may rest assured that the Government, and those who. support the Government, are not skipping away from it. We are well aware that world competition is becoming keener-. The Government has sent trade missions to South Africa and- South-East Asia, and no doubt missions will be sent to other places. Our publicity has been stepped up in the United Kingdom, which is one of our best markets for certain products. Our publicity in South-East Asia has also been stepped up, and our contacts have been improved in many places. The Government is continually striving to improve our overseas market? and our publicity.

Much has been said and written on the subject of our cost structure. Perhaps it is trite to say that we are in danger of pricing ourselves out of world markets. It is trite, but it is true. It is a very big problem, which, we all have to face. 1 want to make it clear, once again, that the Government is in favour of high wages. The Government was criticized by the Leader of the Opposition on Tuesday night on the question of wages. The right honorable member is not in the chamber now,, but I remind his party that the Government has always made its position clear in relation to wages. Honorable members on this side of the House do not believe that wages and hours should become the plaything of party politics. We believe that those subjects are properly dealt with by the arbitration courts. At the same time, the Government instructed counsel to appear on its behalf some months ago in connexionwith, an application to the Commonwealth Arbitration Court in relation to margins. We- believe in the payment of proper and adequate margins for skilled, work. I. consider that much, of the industrial unrest, and most of the difficulties of our cost structure-, are brought about by goslow tactics and the activities of union agitators.

We had a warning a few months ago from a visiting professor from the United States of America, Professor Nathaniel Peffer, who was very forceful and direct in his criticism of us. Perhaps in some respects that criticism cannot be justified, but in others I believe it to be fully justified. He criticized us, in particular, for not working a full 40-hour week. He did not criticize so much the fact of the- 40-hour week, but he did, with justice I believe, criticize us for not working an honest 40 hours a week. As a nation, we must face that problem and solve it. He also referred to our attitude of mind towards productivity. We know very “well that in the United States productivity is regarded by employer and employee alike as the very basis of individual and national prosperity. As I have said in previous speeches in this chamber, I believe that there is scope in this country for an educational campaign in industry throughout the nation and in the trade unions, with a view to emphasizing what has been learned many years ago in the United States, which is, that greater productivity, greater output a head of working population, is the sine qua non without which Australia cannot prosper and progress, and without which our standard of living cannot be maintained, far less improved. The interests of employer and employee are, in many respects, absolutely identical, and it is heartening to read in financial newspapers and other journals that incentives, profit-sharing, and the issue of shares to employees, particularly in big industrial organizations, is receiving greater attention in this country.

Another point to which attention has been given in Britain and the United States, as well as elsewhere, and to which this country could well give attention, concerns the sending of productivity teams to the United States and other countries from which we can learn, in order to study methods, techniques, mechanical aids, time and motion saving methods, and :so on. I believe that industry has much to learn from other lands, in particular the United States, because America realized decades before the rest of the world, and certainly decades before we have learned, the essential hearing of productivity on national prosperity. The United Kingdom Productivity Council, by the way, is a non-political concern and I believe .that, to be successful, a productivity council in this country which would send organized productivity teams to the United States and elsewhere should, and must, be of a non-political nature. I understand that the chairman of the productivity council in the United Kingdom -at the present time is a trade unionist, ;and I think that is very rightly so, because it emphasizes something that T have stressed before - the need for employer and employee to get closer together, and to get rid of the old mistrust and deep-rooted, outworn prejudices that have existed between them, .and which belong to the nineteenth century., and not to this ‘Century of -progress.

I turn now to national works ‘and national development. It concerns me very much that no progress has yet been made towards achieving any kind of agreement between the Commonwealth and the States in regard to a national works priority. We are still growing, as we have grown over the years, like Topsy. We are not growing in an ordered fashion as we should, and must, grow if we are to ‘achieve national greatness within the time that we hope to achieve it. I believe that if we had an ordered national works programme we could put this country on a better economic and national footing than ever before. Let us get rid of these stupid State-Commonwealth jealousies. The fact that a particular State government may happen to be of a political colour different from that of the Federal Government in office is surely no reason why the national interests should not be placed first. I believe that Commonwealth and State relationships are one of our great weaknesses. It is to be deplored that some State Premiers and other State Ministers continually bicker and gibe at the Australian Government. The honorable member for Martin made some reference to this, and criticized the Australian Government for not making more generous payments to the States. If the honorable gentleman cares to examine the records over the years he will find that not only in the last year or two, but also during the whole term of office of the present Government, the aggregate payments to the States have far exceeded the amount that the States had ever previously received from the Commonwealth. In some years the payments to the States have totalled more than three times the highest amount paid during the Chifley Labour Government’s term of office. We on this side of the chamber believe in co-operation with the States, and we have given reality to our “belief. We have not confined ourselves to words, but have shown our sincerity in deeds.

Another feature of our economy which concerns me very much is the continuance of uniform income taxation. I believe that this system is against the best democratic interests of Australia. It breeds irresponsibility in State governments. It is wrong in principle, and I believe it is thoroughly bad in practice. I do not need to say more than that on the subject, because the record speaks for itself. We have an annual get-together in Canberra consisting of the Prime Minister and the Treasurer, representing the Commonwealth, and the Premiers and the Colonial Treasurers representing the State governments. They haggle and argue and wrangle, and the Premiers and State Treasurers invariably go back to their States criticizing and jibing at the Commonwealth on the ground that it has not granted them enough money. Yet the record shows that under this Government the States have been more generously treated than ever before in the history of uniform taxation. But the moans and the groans continue, just for the sake of some cheap political capital that the State Ministers wish to gain.

Another big problem which faces Australia, and with which the whole of our cost structure, and indeed the basis of our economy, is tied up, concerns the division of financial and economic powers among the Australian Government, the Commonwealth Court of Conciliation and Arbitration, the State industrial commissions, and the Tariff Board. I have not time to analyse the position in detail, so I must content myself by saying that, in some respects, these organs cut across one another to a dangerous degree. We have seen a practical illustration of that fact during the last three or four years. Indeed, only a few weeks ago it was announced that the New South Wales Government intended to revert to the system of quarterly adjustments of the basic wage. That is an illustration of the way in which the whole of our economic system could be put into a state of imbalance. If other State governments were to follow the lead of the New South Wales Government we would be heading for great economic trouble in the next year or two.

Speaking on the subject of defence, the honorable member for Martin criticized the Government for its alleged failure to reduce the defence vote in accordance with the present international situation. In that respect he was no doubt following the line laid down for him by the Leader of the Opposition (Dr. Evatt). May .[ point out that we have not yet been given any clear and firm undertaking by the Soviet bloc, nor indeed have we been given the slightest real indication, that there is any change in the basic concept of the international policy followed by that bloc. We have certainly seen some slight, superficial easing of international tension since the Big Four talks at Geneva, but we have not yet been given any genuine and irrevocable undertaking by the Soviet bloc that the Communist nations are not still bent on world conquest. Last night we heard a very interesting address by the Minister for External Affairs (Mr. Casey) who answered, much more completely than I could do, the contentions of honorable members opposite about the adequacy of and need for our defences. We all know from the record what the attitude of the right honorable member for Barton, who leads the Opposition in this Parliament, is to the question of defence. One illustration is sufficient to show it. The Leader of the Opposition, when the last Labour Government was in office, refused to allow the great United States of America to continue using Man us Island as a bastion in the defence system of the South Pacific.

Mr Peters:

– This Government has done a good job up there - I don’t think 1


– This Government is doing a very good job, indeed, in relation to all the defences of this country. The Government certainly believes that there is no justification at present for any large reduction of our defence expenditure, because we are currently involved in what might become considerable commitments in South-East Asia. One immediately discounts any remarks made about defence by the Leader of the Opposition, because the right honorable gentleman always leaves the danger of communism out of account. In the course of my political career, I have never once heard the Leader of the Opposition denounce communism or warn this country of the dangers of communism or of the likely approach of Communist forces to our shores. It 13 most necessary that we should defend and develop this country, and those facts are fully recognized by the present Government.

In recent times, there has been a heartening influx of American capital into Australia, and the dollar loans that have been negotiated by the present Government have all contributed to the speedy development of the nation. During the last year or two, oil and uranium have been discovered here, and I believe that those two important materials will play a large part in the development of our industry and in the stabilization of our economy.

I believe that an important matter to which we could give more thought is decentralization. I was interested to read in the press a few days ago a statement attributed to the Roman Catholic bishops of Australia on the subject of decentralization. I have been interested in this matter for a long time, and I believe that this Government and all parties concerned, including our industrial leaders, should give a lot mors consideration to decentralizing our forces, our population and our industry. I say that because Australia is a large continent, and we are not occupying and using nearly enough of it.

There has been much criticism of General Motors-Holden’s Limited and other large corporations. The Leader of the Opposition had quite a lot to say about shipping combines, and what he called the extortionate profits made by industry.- May I say that General Motors-Holden’s Limited, to take one large industry, did make a very substantial profit in the year which ended on the 30th June last, but it should be recognized that that concern is playing a notable part in the development of this country.


– Order ! The honorable member’s time has expired.


.- In his recent speech on the budget the Treasurer (Sir Arthur Fadden) said that his budget was a national stocktaking. I have examined the five previous budgets that he introduced, and did some stocktaking. After closely examining the budgets, and after reviewing the promises and the performances of the Government, I finally concluded it had a very, very poor record. In 1949, the Prime Minister (Mr. Menzies) delivered a policy speech during the general election campaign. In that speech he told the people that he was not putting a list of promises before them, but that is just what he did - and some of those promises were rather outstanding. As a matter of fact, they are still outstanding.

The Prime Minister promised in 1949 that if he were elected to office he would reduce taxation. I shall prove that he has doubled taxation. He also made glamorous promises about homes for the people. He had advertisements screened in picture theatres showing the homes that he said he would build, and the happy little children playing on the green lawns around them. The land upon which those homes were to be built is still desert. He said that housing was a national problem, and would require finance; but he failed to give adequate consideration to housing. He said that big schemes of national development would be instituted, but the only scheme that the Commonwealth is concerned in at present is the Snowy Mountains Hydroelectric Scheme. But even that was commenced by the last Labour government, and after it has been completed there will be no more great national schemes started until Labour again assumes office. The Prime Minister also promised in 1949 that if elected to office he would reduce dollar expenditure. However, we all know that not only has this Government spent all the dollars that we have earned since it has been in office, but it has raised as many dollars as it could by way of dollar loans. It has raised four such loans. The Prime Minister spoke of the great improvements that he had in mind for the Public Service. One of the first things that he did after he attained office was to sack 10,000 public servants who had been trained to do government work. He has recently again attacked public servants by refraining from acting as he should have acted in relation to their recent marginal increases of salaries.

Tile Prime Minister also promised many things to primary producers, but he failed to honour those: promises, just as he has failed in every other way. He; said, “ We believe that rates of taxation, must be steadily reduced as national income rises”. He also said, “We will renew the incidence of indirect taxation; with a view to reducing it”. I shall, review those- two promises of his now. If he had honoured his first promise,, taxes would have been reduced in. the first year after he- assumed office,, but we all know that both direct and indirect taxes were increased. Also, postal charges started to rise until they are now £20,000,000- a year greater than they were in 1949. The Treasurer’s own figures show, that in 1949’ the- national income of Australia was £1,950,000,000, but the present Budget shows- that the national income to-day is £4,O33,,OOO,OO0-. Therefore, honorable members will perceive that our national income has just about doubled since- 1949. Now, if the Prime Minister had fulfilled his 1949 promises- to reducetaxation as the national income increased, taxes would have been reduced by half. But we all’ know that that has not beendone.

In 1949-50, taxation produced’ £471,000,000. In 1950-51, the first full financial year after this Government assumed office, the taxation field was made wider in order to bring in £676,000,000. Therefore, in the first year that this Government was in office, the total amount collected in taxes increased by about £200,000,000. The story continues. It jumped again in 1952 to £718,000,000, and again in 1952-53 to £919,000,000. That is when the Treasurer grabbed £114,000,000 from the people.. Then he said that the next budget was to be a reducing budget, but the figure, was still £901,000,000. In one year, he took £] 14,000,000 from the people, and in the next- year he gave them back £18,000,000. And then he claims that this is a taxreducing government! But all those matters have been blotted out by the present budget. This budget supersedes all others, because the total taxation collections this year will amount to £930,000,000. ‘That is the record of a government the leader of which promised to reduce taxation, who said the Labour party was extravagant, and who called us all sorts of things.. Those figures prove that the cur remit budget is double the size of the last Chifley budget.

The Prime- Minister als©’ promised- to reduce indirect taxes. In 1949’, when Labour was in office-, sales tax receipts amounted to £39,000^000’. We looked on this as a vicious tax, but, in- order to obtain money for the rehabilitation of our ex-servicemen, we had’ to explore al’l fields of taxation, audi we- collected £30,000,000 from this source. But this Government, which promised’ to reduce- sales tax, budgets this1 yea]’ for the- collection of £106,000,000, or three times as much as the Chifley Government collected from sales tax in 1949; The estimate is actually £5,000.000 more than it was last year. Receipts have been rising all the time.

The next field of indirect taxation that I shall examine is excise duty. In 1949, when Labour- was in office, collections totalled £62,000,000. The estimate in this budget is £159-,000;000. We have the same old story - one of contradiction of promises all the time. Why did the Government make those promises? We have in black and white- evidence of not only broken promises but also failure to reduce taxation.

When imposing sales tax, this Government has no mercy for the family man. If it had’, it would abolish this tax. Sales tax is not a graduated tax. It is a tax of 12$ per cent, on all sales of goods named in the schedules. The pensioner who buys commodities lias to pay the impost of 12$. per cent, just the same as the company director, who has plenty of money. This is a vicious tax, and although the Government promised, to abolish it, the undertaking has not been honoured.

Excise duty is another indirect tax that hits the worker, because it is levied on beer and tobacco. The Treasurer collects about 50 per cent, of the price paid by the worker for a mug of beer. The incidence of excise is even more vicious in respect of tobacco, the duty on which is 70 per cent. This means that the worker, in paying approximately 29s. for a pound of tobacco, is paying 20s. to the- Treasurer. Yet the Government and its supporters told the people^ “ We will reduce taxation if you elect us to office “. i shall now deal with another matter that has been referred to by the Treasurer as. well as by my own leader. I refer to the initial allowance for depreciation. That reminds me,. of course, of the promises this Government made to the primary producers. This Government, and especially the Country party members of it,, pose as the friends of the man on the land, but we all know how ridiculous and laughable that is. In 19.46 the Chifley Labour Government was the first to introduce an initial depreciation allowance that would benefit the primary producer. That depreciation allowance was of. benefit to both, primary and secondary industry. Ft encouraged industry to replace worn out. plant and equipment with the object of increasing production.. In 1949, the Labour Government increased this allowance to 40 per cent.. This greatlyassisted primary producers for, in- effect, it meant that most small, farmers were completely freed from taxation. This’ Government that poses as the friend of the farmer abolished this concession that was given by the Labour Government, in the 1951 budget, the Treasurer, who is the Leader of the Australian Country party, cancelled the allowance. He said it was no longer necessary. Taxation allowances in the form and manner I have indicated are proper and wise, for they act as a boost to our general economy. We have nothing to lose by stepping-up primary production, which should be encouraged in the way in which the Labour- Government encouraged it and1 in. the way in which the present Treasurer said it. should be assisted. He appointed a. committee to inquire into this matter-, and he: complimented it upon, bringing down- such a good report. Of what use is a good report if it is- not implemented? The Treasurer has indicated that he does not intend, to implement it.

The serious adverse overseas trade balance, which now stands at the terrific amount of £256,000,000,. is a warning and indication, that all is not well with our economy. If this position is to be remedied - and it must be remedied if our. social security and standards of living are to be maintained - action must be taken quickly to correct the present trends. Increased production at cheaper rates, together with improved quality, is the answer. Scientific techniques should be pressed into service to achieve these ends. The 40 per cent, initial depreciation allowance granted by the Labour Government did a lot to help in this direction, and this is the kind of assistance that should have been continued to ensure that every producer, whether he be primary or secondary, would install and maintain the most modern means of production.

I come now to the subject of manpower. We know this is important, but it is not the only factor in production. This Government believes, when things go wrong, when production decreases, when our export trade falls, and when we get adverse trade balances, that all it needs to do is to blame the Australian worker. This Government believes that the Australian- works too- few hours, and charges too much for his labour. 1 think that view is absolutely wrong.. I believe that, the Australian worker,, if he is. supplied with the right tools and modem equipment, is equal to any worker elsewhere in the world.


– That, has been demonstrated on the Snowy Mountains project.


– As the honorable member, for Watson (Mr. Curtin) points out, that was proved not so long ago on the Snowy Mountains project when Australian workmen broke, a world record in, tunnelling through a mountain-.. Give them the. right tools, the- right pay and the right recognition, and there is no doubt that they will step-up- production.

The next promise the Prime Minister made was in connexion with prices. He spoke about this, important matter in the general election campaign in 1949, and I ‘ find in the. little booklet that contains his policy speech the following, passage : -

The greatest charge against the financial and economic policy of the Chifley Government is that while it has paid a good deal of attention to increasing: the volume and circulation of money it has largely neglected, the problem of what and how much tha-t money will buy.

That is no laughing matter. We all know how much in reverse the position is. Every housewife knows what a grievous problem this is. The Prime Minister said, in 1949, that the Menzies £1 of 1939 was worth only 10s.. Value has now evaporated entirely from that £1. Its value is below zero, if I may say so. I quote the facts to show how its value has decreased.

The following table, showing the prices of commodities in everyday use in 1949 under a Labour government, and the prices of those commodities to-day under the Menzies Government, is illuminating:

It is clear from those figures that the charges made against Labour in 1949 by the present Prime Minister were merely cheap election propaganda designed to secure votes. The right honorable gentleman indulged in the pastime of kite-flying. His promises have not been honoured. The continued rise in the cost of living is a serious matter, yet the present Government has failed to take action to check it. Under a Labour government, the cost of living was kept within reasonable limits until 1948. To-day, the honorable member for Melbourne (Mr. Calwell), who is the Deputy Leader of the Labour party, showed that the Australian economy was sound in those days. At that time, the Australian £1 had more respect than that accorded to any other currency in the world. We had in operation a system of national prices control. The result was that, although the cost of living rose in other countries, it was kept within reasonable bounds in Australia. It was impossible, however, to control blackmarketing. Nevertheless, the Labour Government was able to exercise some control over monopolistic exploiters under national security regulations. It is a pity that we have not the same powers to-day.

As I previously pointed out, the cost structure is the most important factor in our national economy; yet this Government appears to have adopted an infantile attitude towards it. Production and distribution are in the hands of a few monopolists, who are exploiting our economy against the best interests of the vast majority of the people. In spite of that, the Prime Minister says that if we let things run along, the law of supply and demand will keep the prices of commodities at a reasonable level. The right honorable gentleman knows full well that the law of supply and demand, or the law of social justice, does not come within the plans of highly organized big business, or the thinking of monopolists. Yet, knowing this, he supports a policy which plays into their hands. If he thought otherwise, he would not acquiesce in the freezing of the basic wage, and allowing prices and profits to go unchecked at the same time. While such an attitude persists in high places, the people will not be contented, Australia’s economic position will not be stabilized under such a rule, nor will peace in industry be established. The people of Australia have, on previous occasions, shown a willingness to accept sacrifice, when sacrifice is necessary and is equally shared. Our experience in two World Wars proved that, both on the home front and on the battlefront. To-day, our standard of living is threatened because the Government has allowed Australian production to be out-priced on the world’s markets. That is clear from a study of our adverse trade balance overseas. Last year, Australia had a favorable trade balance of £135,000,000, and in the previous year a favorable trade balance of £335,000,000. To-day, however, those favorable trade balances no longer exist; instead, we have an adverse trade balance of £256,000,000. Under the Chifley Government, Australia’s favorable overseas trade balance was built up to £850,000,000. The unsatisfactory position to-day is due to the failure of the Government to take any action to stabilize the economy.

In his policy speech in 1949 the present Prime Minister, speaking of industrial relations, said -

The industrial problem is crucial. The highest production and living standards cannot be achieved without a new and human spirit in the industrial world.

That is true. He went on to say -

No industry can succeed without the cooperation of capital, management and labour. Each must be encouraged. Each must be fairly rewarded. Between the three there must be mutual understanding and respect. Unless employees are energetic and contented, no business can succeed for long. No sensible employee wants the business that employs him to be unprofitable. Yet, unhappily, too many employers wash their hands of their employees as human beings, as if the strict performance of their legal duties would suffice, and too many employees have swallowed the pernicious propaganda of the “ class war “, with the result that it is not uncommonly believed that the success of “ the boss “ must mean the failure of the man who works for him.

Those were nice sentiments, but the Prime Minister has not done anything about the matter. He continued -

There are some enterprises in Australia which have set the good example, and have set up schemes of profit-sharing.

Those were words of wisdom, but, apparently, they were included merely to catch votes. The right honorable gentleman gave the answers to some of our problems, but something more than lip service is required. He went on to speak of profit-sharing schemes, but he has not initiated any such scheme. He has not done anything, and so long as wages chase prices, things will become worse. The fixing of prices should be as rigid as is the fixing of wages. The- problem of prices will not be solved until sufficient workers in the community become the owners and controllers of productive property. Much of the industrial unrest which has troubled Australia in recent months is due to the refusal of certain sections of employers to treat their workers as equal partners in industry. Our economy should be shaped so that social justice can be achieved and maintained. I conclude by saying that it is the Government’s responsibility to introduce measures that will enable the economic system to fulfil its purpose, which is to maintain a decent standard of living for all, and a home for every family.


.- The honorable member for Banks (Mr. Costa) compared the prices of some commodities in daily use in 1949 with presentday prices, but the comparison is completely valueless because 1949 prices are outdated. We should not base an argument on 1949 prices without, at the same time, taking into account the ability of the people to-day to pay the prices charged. The honorable member for Banks should spend as much time looking at the income side of the picture as he has done in looking at the spending side of it. If he were to do that, he would have a better appreciation of the benefits which the people have received under the Menzies Government administration. I shall give the honorable member some facts later, for his consideration. He went on to say that too few people have a share in industrial property. That is true, but I remind him that if the miners of this country had saved the money which, in effect, they poured down the sink by going on strike, they would to-day be the owners of productive property in coal-mining districts. If one wishes to share in industrial property one must “ put some money on the barrel “ and make an investment in industrial property. The way is clear all day and every day for the people of Australia to take their share of the benefits of industrial enterprise. No one will do anything to stop them from taking that share. This is a free-enterprise country in which the individual can take heart and use his mind and ability in producing in his own interests if he wishes to do so.

This budget has called forth the same old socialist attacks against big business and the profits of enterprise to which honorable members have become accustomed. I remind members of the Australian Labour party that participation in business does not guarantee profits. We speak always of profits and sell ourselves the idea that one has only to go into business to make profits. I remind honorable members opposite that it is possible to make losses in business, as some people have learned. The Leader of the Opposition (Dr. Evatt) has subscribed to the foolish idea that any one in business cannot fail to make profits, and he has attacked the budget because it is designed to maintain the status quo. He has adopted the naive socialist approach to the question and has suggested that the only alternative to the preservation of the status quo is an improvement of present conditions. But that is not so. I remind him that, in our free enterprise system, which is based on a profit-and-loss economy, there is one very devastating alternative to the status quo, and that is a disastrous recession from the present conditions of high incomes, prosperity and full employment. This budget is designed to preserve us from that alternative, and therefore it is a status quo budget brought down in the best interests of the Australian economy.

What is true of business is true also of the national economy. There is a time for expansion and a time for consolidation. In my opinion, this is a time for the most careful consolidation of the conditions that we in this community enjoy. Evidence of the need for consolidation is accumulating everywhere, and we ought to conserve, by all the means in our power, the very real economic and social benefits that have been won in Australia over the last few years. This matter is undoubtedly of great significance for every section of the Australian community. For no group in the community does it have greater significance that it has for those people who subscribe to the Labour philosophy and who are primarily dependent on wages for their livelihood. In this community we need to assess our welfare in terms of material things, and therefore we should devote some time to a sober appreciation of those factors in the economy which determine the level of prosperity and our ability to maintain that level. We have been told repeatedly in this debate that Australia at present is confronted by an allpervading cost problem. It dominates our thinking and it will not be solved by hurling epithets across this chamber or by disseminating propaganda in an attempt to show that one political party or another does not know what it is doing. Instead, we must settle down and soberly survey for ourselves the real causes of the changes that are causing a good deal of economic discomfort in Australia. Certainly, the balance of payments problem is becoming more acute. The very factors that prevent us from selling our products in export markets encourage imports into Australia, and so our economic stability is subjected to a double-pronged attack which makes the solution of the balance of payments problem even more difficult.

Little by little, by our inability to .compete with lower-priced commodities, we are being forced out of the few overseas markets that we hold. At the same time, the countries with which we are competing - mainly the continental countries - are not only shipping their goods across half the world and overcoming our import, barriers, but also are underselling comparable Australian goods in the Australian market. This situation must not be allowed to continue for long.

Eight years ago, when acute shortages of most commodities existed in Australia because we had not long come out of a war, we foolishly adopted the 40-hour working week. I am not opposed to it. I think it is a very good thing when a country can afford it, provided, as the honorable member for Ryan (Mr. Drury) pointed out a short time ago, one works a genuine 40-hour week. But the plain fact is that we pushed against the barriers of industrial conditions and allowed our effective working week to be reduced to 32 or 33 hours. I do not mind that, provided that the Australian people understand that the difficulties of the consumers are caused by the benefits that they enjoy as producers, because these two factors must be brought into balance. I do not wish my remarks to be misinterpreted as a condemnation of the 40-hour week. 3 merely point out that it is the cause of some of our difficulties. Although we have adopted the 40-hour week, which was led in, if I may use the term, by the New South Wales Government, we have not really settled down to a 40-hour working week. In fact, many industries require their employees to work 44 hours a week, and pay them four hours’ overtime. In the circumstances, we face great increases of costs. We either pay higher wages for the same production, and therefore costs are higher, or we get less work for the same wage. Either way, costs of production are increased, and no amount of juggling will alter th? fact.

Mr Greenup:

– The position in Australia is no worse than is the position in the United States of America.


– It is vastly worse. As we were told the other day in this chamber, the Americans enjoy the benefit of twice the mechanical horse-power available to workers in this country. Saving inspected several American factories during the last year, I can tell the honorable member for Bailey (Mr. Greenup) that intensity of work, loyalty to the job, and disinclination to find cause for complaint with the boss are material factors responsible for the higher man-hour production in American industry. Productive effort in the United States is so much, better than it is in other countries that the American economy, which is a free enterprise economy in the very best sense of the word, is to-day .bolstering two-thirds of the world’s collapsed economies. That is the record of .private enterprise in America.

Costs have been increasing for a variety of reasons. They feed upon themselves and an ever-increasing upward pressure is .exerted on the cost structure. Quarterly adjustments of the basic wage caused price increases, which in turn caused further wage increases, and so the process went on. Some of the difficulties against which we are now contending are the result of full employment. It is of no use to be chicken-hearted about the situation. One has only to consider the position in small factories employing between 50 and 70 workers to see the adverse effects of full employment. The turnover of labour in such establishments is extraordinarily high. Most of them have to recruit staff from untrained workers who are the only ones available. The small firms spend time and money training those workers who, after three or four months’ training, take better-paid jobs with larger firms which receive the benefit of the skills acquired in the training period. The smaller industries serve as the training ground. Throughout Australia and particularly in the highly industrialized State of New South Wales, solely because they cannot find labour to do tie work for them, the owners of many small plants are doing the most lowly jobs in the establishments when they ought to be concentrating on the problems of management.

Other factors also come into the matter. I heard a story only a week or two ago from a man in the moulding industry who took a toolmaking job round the trade. Once upon a time such a job would have been done by a third-year apprentice, but he could not get the job done at all. He was told, “ We have nobody here who is responsible enough to do that job”. These are the handicaps under which industry is beginning to labour. I am not going to place the .blame for that on any one body in industry, either workers or management, but there is a combination of circumstances in the industrial picture to-day to which we shall have to pay some heed, and to correct which all factors of the Australian economy will have to exercise a good deal of restraint.

It is abundantly clear from this picture that we in Australia are rapidly getting out of line with the industrial conditions in our competitor countries. In England, I am told, the hours of labour are 45 a week, whilst in Germany the average working week is of 56 or 60 hours’ duration. The Japanese are working long hours, and so .are the peoples of Continental countries. I think, perhaps, the best illustration of this matter comes from a comparison of wages in the woollen and worsted industry in England. Such a comparison shows that Australian wages are from 83 per cent, to 109 per cent, ahead of the wages paid in the United Kingdom. In the engineering trade, the percentage difference in wage rates, all expressed in Australian currency, has risen from 19 per cent, in 1945 to 75.6 per cent, in 1954, so that on two counts, on the question of wages and hours, we are getting vastly ahead of our British competitors. That, of course, accounts for the fact that our cost structure does not permit us to compete successfully on the British market.

I am not going to advocate longer hours, because I do not think it is possible to solve the problem by that means. I merely want to point out that if we get too far ahead of our competitors, ordinary economic factors will apply and we may well lose this delightful era of prosperity which we have in this country to-day. Those comments illustrate above all other factors why this consolidation budget is a very sound proposition at this time. We in this country have made some very great gains in the way of shorter hours and better wages. In those directions we have made greater improvements than our competitor countries have done. In addition, we have granted long-service leave, sick pay, and so on. We have developed full employment, and out of all of these things we have developed prosperity, which is a very delicate flower. Prosperity is very much like a balloon. Blow it gently and it will get bigger, but blow it too hard and it is likely to burst in your face and leave you holding the pieces. I hope that that is not going to happen in this country. The basic economic truth is that we cannot expect to get more goods than we are prepared to pay for by work put into the common pool.

I turn now to the elements in the budget. The question of whether taxing purchasing power out of the hands of the consumer is a better solution than leaving more of the earnings of the taxpaying income-earner to encourage production is a problem which will always be before the economists. But I do think that the revenue to-day is making too much demand on the national income. There is no room in this budget, as the Treasurer (Sir Arthur Fadden) has pointed out, for any vast alterations, either by way of increased taxes or by way of increased benefits. There is room only for a re-arrangement, within the economic structure of the budget, of these things that require attention.

I refer to the public works content in the budget. I should rather see public works eased down at this stage of the game in favour of income tax concessions, particularly to companies which would plough them back, as has been pointed out on both sides of the committee, into improving the machinery of production. There is a very entertaining difference of opinion between the various members of the Australian Labour party on this issue. The Leader of the Opposition, in his speech on this budget, claimed that our resources were being drained from consumption into investment. He pointed out that, in a period of a. little more than five years, the productivity of labour in Australian industry had advanced by something like 22 per cent., and he complained that this increase of productive capacity was due to the workers, who had received only 7 per cent, of the benefit of it. There are very glaring fallacies in that kind of analysis. The plain fact is that the 22 per cent, increase of production, to which the right honorable gentleman referred, is not the production of labour or of capital, but of a partnership between labour and capital. Inevitably, both sides have to receive their share of the increased returns.

I cannot believe that the Leader of the Opposition thinks that machines can be produced without capital, and I do not believe, in the same context, that the right honorable gentleman is of the opinion that capital will somehow find its way into industry without any promise of reward. He suggested that we ought to go on expanding. That, after all, is the whole plan of this status quo budget. He said that expansion is being limited, but I put it to him that, on the statistics relating to increase of population in this country, we find ourselves pledged to provide another 100,000 openings for productive employment every year, and the statistics also show that, in industry to-day, it requires between £2,000 and £3,000 of invested capital to provide one job for one worker. All of that, on the most elementary calculation, indicates that somewhere somebody has to provide £250,000,000 of additional capital expenditure, capital investment in industry, every year to keep this process of expansion going. It may well be that the thing to which I have referred - the cutting of our public works sector and the boosting of our private works sector - is the best possible aid we can give to this industrial and national expansion. The Deputy Leader of the Opposition, the honorable member for Melbourne (Mr. Calwell), is also hitched to the same cart, but he is pulling slightly in the opposite direction, because he says that industry must have the most modern machinery we can produce. He cannot quite get away from the old Labour party story, but he wants to deny industry the fruits of investment. Of course, the Leader of the AntiCommunist Labour party (Mr. Joshua) finds himself hitched to the same cart too, but he is pulling in a third direction. He complained bitterly that the workers in industry to-day are sharing too easily in the great benefits of this prosperity of expansion. He complained that the benefits of production in industry are going to the worker too freely. Is it any wonder that the Labour cart is being pulled to pieces?

To return to the elements of the budget, I wish to concern myself with the fact that the Australian Government is carrying its public works on revenue. I do not agree that all of this national development and all of this public works programme ought to be carried on revenue, but of course it is a factor which has arisen out of uniform taxation, to which my friend, the honorable member for Ryan, referred earlier to-day. It is a factor to which I hope the Government will shortly give earnest attention. The point is that, if the Australian Government is going to pay for its works out of revenue, taxes will have to go up by the same amount. So, to-day in the budget there is a content of something like £100,000,000 of taxation which ought not to be there, and it is there only because we are carrying our works programme on revenue and, in general terms, so that we may feed the indigent States which, in their turn, are wasting a good deal of this public money.

It is a mistake to think that the only kind of national development is that which is seen in dramatic public works. The very best form of national development in this country results from the expansion of private enterprise, in what we might reasonably call a private works programme. All over Australia to-day, public works are being financed from revenue. It takes ten, fifteen or twenty years to bring such works to production, and during the whole of the construction period these public works are inflationary in the extreme. Whereas public works are tax consumers, private works are tax payers. Public works provide temporary employment, but private works provide constant employment and ever-improving standards. It is for these reasons that money that is put into private works expansion becomes production so much more quickly than when it is dumped into public works. It is only necessary to look at the dramatic construction of the recently opened steel-rolling plant at Port Kembla, or the almost unheard-of rapidity of construction of the oil refineries of this country in the last few years, to see the best illustration of the’ point that money ploughed back into investment in private industry becomes production in a quarter of the time that the same amount of money would become production in a public works programme. I do not deny the need for great public works programmes in this country. This is a frontier country, and we ought not to withdraw effort at this stage. We cannot afford to do so, but I believe that the public works programme should not be out of step with the employment opportunities being provided by private works programmes. To-day, we hear a great clamour for public works. We want roads, schools, hospitals, rail unification, greater waterfront works, and so on. All these works are all right in their place, and there is not the slightest doubt that we need them all, but we must have some regard to our capacity to undertake them, particularly under conditions where we are very much inclined to limit our effort, when we seem to have the crazy idea that these are money problems and that if we had the money we could get the work done. In conditions of full employment, even if we had the money we could not find the men to do these great public works and in our effort to proceed with them we can do nothing more than shuttle people from one job to another, so causing ever-increasing costs and adding to the burden of inflation. We might as well be realistic about it. In this country of 3,000,000 square miles, with a population of only 9,000,000 people, there are some things for which we shall have to wait, clamour though we may. There is nothing like a little Divine discontent to keep us interested in these problems, but we must exercise restraint.

The next subject with which I wish to deal is very closely allied to the matter of public works. A few months ago the Treasurer announced a budget surplus of £70,000,000. I rather wished at the time, as did many people who were aware of this particular problem, that there might have been some better method of indicating the actual content of the £70,000,000. In fact, it was committed to trust funds, to public works, to assist the States which complained about it, and to debt redemption. I am very glad to see that on this occasion, when we are budgeting for a ‘ surplus again, we have already established a loan consolidation and investment reserve into which this amount will go-. T hope that twelve months hence,, when the surplus becomes a reality, it will not be announced in a way which will mislead the public into believing’ that there is a vast fund’ of spending money into which all sorts of people can get their fingers. I should like to. refer to one gentleman who knew very well the facts of the situation concerning last year’s- surplus but could not pass, up the opportunity to make’ cheap propaganda out of it. I refer to- the Premier of New South Wales, Mr-. Cahill.. As the honorable member for Ryan, has pointed out, year after year the State Premiers have come here to attend conferences of Commonwealth and State Ministers and meetings of the Australian Loan Council. They have invariably asked for greater amounts than, they hoped to. receive- and, when they have been refused and given a realistic allocation, in most cases- it has been the New South Wales Government which has led the chorus of disapproval and1 used the alleged paucity of the payments to- the States as an excuse for its own deficiencies in administration-. We are becoming tired of that kind of political dishonesty: If anybody ought to have known the facts about the Commonwealth surplus of £70,000,000 last year the Premier of New South Wales ought to have known, because on facts which were revealed and which I needed to ascertain about his 1954 figures, New South Wales itself showed a budget surplus of £49,000,000. [ admit that most of that amount was committed in much the same way as the Commonwealth surplus of £70,000,000 is committed, but. Mr. Cahill saw fit to regard the £70,000,000 as spending money. He exploited the fact that the average man in the street does not understand the way in which, budget .surpluses are arrived at, and he made very bitter complaints about that amountHe said, “ The Commonwealth has spent almost £100,000,000 on capital works from revenue,, but the States are compelled to borrow money at the full bond rate in order to carry out their- works programmes”.. It is. only a little while since this Government was feeling very noble about, having, relinquished, its 2.1) pet: cent, share of loan- raisings- in this country in an effort to help the poor States, yet a few years later it is castigated because it is. now financing its works- from revenue and apparently the State government - if I am to interpret Mr. Cahill’s statement aright - propose? to come here at any tick of the clock And demand that the federal revenue he increased by another £200,000,000. so that the States themselves, may be able to do likewise- As I see it, this underlines the real need for the Government to. give very early attention to the subject of uniform taxation. lit is true as the honorable: member for Ryan and others have pointed out, that there is. nothing- more destructive of the federal system in. this country than the uniform, income tax; system,, under which the Federal. Government becomes the sols’ collector of income tax and the: representatives of the State governments pome to, Canberra,, put out their hands and ask for more than they know they can possibly get and then go home, complaining that they cannot proceed with State works because, the wicked1 Federal Government will not give them the money.. The term, “ matters of national importance “, is being vastly overworked. The honorable member for Banks drew attention to the fact that education is a national problem. Of course it is a national problem, as are roads, railways and all the other services, but the Constitution clearly divides the responsibility of State1 and Federal governments; and we cannot lightly tear up- the Constitution in regard- to these matters-. If the State- governments are really perturbed about this problem, we would like to see a little more readiness on their part to consult with the Federal Government in regard to a re-survey of the constitutional position and a rcdivision of constitutional responsibilities between State and Federal governments.

Time is sneaking on and, in closing, 1 mast commend this budget. I thing that it represents the wisest course the Government could have taken at this particular time, and my reservation about the redistribution of certain tax expenditures in the budget, is only a minor one.

In does not detract in any way from the courage and far-sightedness of the’ Government in producing a budget of- the type of that now before us. After aM> we- have lived through five years, during which the Government,, time after time, has-been castigated and. pilloried for its- foolish, unwise- and destructive decisions, only to see every one of those decisions acclaimed as the wisest that could have been made in the circumstances. When my friends opposite complain about the crimes of omission and commission of this Government, as- far- as I am concerned the adequate answer to them1 is to remind them that the Government is still1 here-.. It has won three elections and, on present indications^ it will win a fourth election much easier than it did the others.. It has won these elections because- the Government can- see a little farther ahead; than- my friendsopposite,. and1 because it has a little more courage and honesty to implement a decision which to-day is unpopular but which, a- few years hence1,, will be shown- to have been abundantly justified.


’.- The budget has been described variously. The apt phrases which I have seen published’ include “ brown “’, “ colourless “, “timid”; and “tight-rope walking”. The honorable member for Paterson (Mr. Fairhall has even described it as a consolidated’ budget. These terms seem to me to have propaganda rather than descriptive value. However, whichever term has been used, it does not seem, to me to have been very critical. The terms by which it has variously been described suggest a degree of disappointment,, apparently in people who were waiting to receive some information and have not received it. Disappointment may be expressed in various ways. These expressions seem to have been the means chosen to indicate that disappointment - describing the budget by various terms of propaganda, rather than by terms, which should illustrate precisely what was wrong with it. Putting the whole thing bluntly and without trying to find a colourful expression, I say that there- is evidence of inflation.. Moreover,, those who see evidence of inflation, as exemplified, in the budget, are afraid ©£ it,, and are looking for a cure. Because they did not find a* cure in the budget, they have expressed disappointment in various- ways.

We can hardly cavil at the diagnosis presented in the budget, but it is obvious that no cure has been offered by the Treasurer. The best the physician could offer was to hold’ the disease at its present pace, while hoping for something better. May I say, with great, emphasis,, that the economic condition of the country is- not healthy. The Treasurer places some reliance on giving, advice, and. on issuing, a call for voluntary effort through self discipline. That seems to me to be somewhat impractical.. Whilst increasing Government expenditure very considerably, as the budget shows, the Treasurer is calling on others to reduce expenditure. In other words, he is putting, precept before example.

Again, he is confronted with a record national income of £4,033,000,000 and a personal income of residents of £3,833,000,00,0.. He realizes that the nation has consumed’ more than it has produced by the amount, by which, its imports exceeds its. exports. Further, he- realizes that, we have diminished our national resources by borrowing overseas. Those two- things seem to me to be patent from the speech of the Treasurer. Our exports have dropped by £49,000,000 while,, at the same time-, our imports have risen, with the. addition- of freights, by £184,000,000^. The deficit in- the overseas balance, which is. standing at- £256,000,000, is equal to- a third of the value of our exports. All these figures emphasize the: fact that we have consumer inflation, yet all the Treasurer does is to show a red light,, both to individuals and governments, hoping that each will’ act voluntarily as he has suggested. There is an implied threat if they do. not act voluntarily. Drastic action will be taken should wool prices fall significantly. _ There is need for action to assist essential production, and. to direct spending into, the proper channels. It has been agreed that the States shall borrow £190,000,000, and they will be competing with hire purchase companies which are offering- between 5 per cent, and S per cent, on capital invested. Therefore, it is safe to predict that the full amount required by the Australian Loan Council will not be forthcoming. The greatest concern is being expressed in my municipality now. At the last meeting of the municipal council that I attended, advice was received from the Treasury that the amount of loan money available to it this year would be £160,000.

Mr Timson:

– From the Australian Loan Council?


– That advice was received from the Treasury after the meeting of the Australian Loan Council. However, when I discussed the matter with two or three officials in Victoria, they estimated that the best we could expect in my municipality would be about £60,000. That underlines the seriousness of the current situation.

One might reasonably have expected that a plan would have been unfolded in the budget for an adjustment of our adverse trade balance because an adjustment is inevitable eventually. Such a plan might have to be a long-term one, if drastic unemployment is to be avoided. Honorable members will have noticed that this matter of the adverse trade balance has induced a number of suggestions. Among them is one that we might have to devalue the currency. I have given some thought to this subject because suggestions have been made that this is the proper time to devalue the currency, and it is necessary to analyse the situation. My belief is that competition of sterling countries in the world market is too keen for us to earn much from wool and wheat if the £1 is devalued, but it is possible that devaluation may be instituted against the will of the Government. Most honorable members will recall that in September, 1949, the £1 sterling was devalued by the markets refusing to deal. There was, in fact, considerable loss of confidence.

I believe that positive measures could be taken to hold and even enhance the value of the £1. One way would be to increase our exports by reducing costs, and I suppose that if we were looking for ways to reduce costs, the question of lower tariffs would have to be considered. Possibly, the most important suggestion that could be made at the moment is that we should try to build up our import replacement industries. If I understand Dr. Coombs correctly, he appears to have some such idea. Apparently, he believes that there is a better prospect of developing our import replacement industries than of expanding our exports at the present time.

I have examined some figures in connexion with this matter, and I believe that the establishment of oil refineries could lead to an improvement of about £20,000,000 in our internal income. 1 believe that tobacco growing could be expanded, and that it would result in another saving of £5,000,000. In my estimation, it would be possible to expand the steel industry, and that could be responsible for a saving of anything up to £45,000,000. Paper manufacturing offers great scope, and it is estimated that it could be increased by £10,000,000. I have information that I believe to be reliable to the effect that if we were to reduce purchases of imported soft woods, and be satisfied to replace them with hard woods, we could effect, a considerable saving. In connexion with the building industry, there is room for expansion of cement production, glass making and tile manufacturing and I have been informed that, at a conservative estimate, a saving of about £13,000,000 could be made on those three items. I am also informed, on what I believe to be good authority, that chemical manufacturing offers scope for wide expansion, and could be responsible for a saving of £5,000,000. I have east my mind over these various propositions in the past two or three weeks, and indications are that there is room for expansion in the production of these and other goods to the tune of £150,000,000 a year.

I put these matters forward merely in the form of a suggestion, because I believe that the Treasurer should have produced a plan when he presented the budget. Moreover, I believe that what I have said illustrates that it is possible to evolve a plan. I have offered those suggestions in order to illustrate that a plan could and should have been produced.

I am concerned very much with the inflationary trends, because it is always the same person who bears the burden of inflation. The person who bears the brunt of inflation always happens to be the family man. He feels it, first and foremost, in the field of housing. That fact cannot be overstressed. It is a fact that it is unnecessary to mention, because it is so patent to all. If the family man is building to-day, he faces extortionate costs. If he has not reached the stage of building, but desires to build, he is confronted with the terrible shortage of finance available for building loans. Previously, his one ray of hope was a loan raised through a co-operative housing society, but now, as most honorable members appreciate, the amount of money available from these societies has shrunk so much that it is almost negligible when measured in terms of the demand for loans. I am conversant with this position, because I happen to be a director of three co-operative housing societies. The demand for loans is enormous in all suburbs of Melbourne in which co-operative housing societies have been formed. There are people who hold reliable assets in the form of land or cash but who are unable to obtain even membership of a co-operative building society, because the societies are unable to obtain loan moneys. That seems to me to be a tragic position. So far, this Government has offered no ray of hope in the form of a plan to increase loans appreciably for this purpose, at any rate during the next twelve months.

War service homes finance lags dreadfully, even though the last financial year closed with a huge and significant surplus. The lag in providing finance for war service homes is so great at present that borrowers must arrange temporary finance, even after the war service homes administration has authorized the grant of a loan eventually. It seems to me that State housing is getting the lion’s share of the money available for housing purposes, though the original purpose of the scheme has long since passed. When I make that statement, I do not want to be misunderstood. State housing commenced on the basis of eventual slum reclamation. That seems to have passed long since, because very few people in slums now are able to secure State housing commission properties. It appears that a State government is just a convenient landlord, acting on behalf of people who probably will exert very little effort to buy their houses when a right to buy them can be exercised.

The sales tax presses most heavily on the family man. This year, an additional £5,500,000 is to be collected in sales tax, principally from the family man. I want to make it perfectly clear that I am opposed to the sales tax in any case, because any form of indirect taxation is obnoxious to me. I believe that the only proper and fair form of taxation is direct taxation. It matters not to me who introduced this form of indirect taxation, because my opposition to it is complete. There is not the slightest doubt that, at the present time, the sales tax is pressing very heavily upon the family man. This budget, far from giving him any relief, envisages a considerable increase of the revenue from the tax during this year.

Even the pay-roll tax, from which an additional £5,000,000 is expected this year, affects the family man. Municipalities have to meet this impost, and there is but one source from which municipal revenue is derived. Municipalities have writtten letters to me complaining about the burden of the pay-roll tax. The only means by which they can secure the money to pay the tax, especially in what I may call the middle-class suburbs, is by increasing rates, which are collected mainly from family men. In my opinion, it would be well if some means could be found to avoid an impost such as this. The exemption limit, at least, could have been raised. One of the most significant features of this matter is that the most profitable business of all, a finance company, pays practically no pay-roll tax. Most of the finance companies, which are raising money from the public with the object of lending it on time payment agreements and the like, have so few people on their staffs that the pay-roll tax does not strike them at all. Yet payroll tax must be paid by municipalities, which can collect the money only from their ratepayers, who, in most instances, are family men.

The family man is repressed by a lack of facilities. When he wants a telephone installed in his house, he finds that he is last on the list .of priorities. He is deprived by .the Government ,of amenities that are provided for those who make the mOSt out of the community. The family man pays the price of inflation in full. He pays for it in relation to commodities, housing and facilities. Road-making in his community provides a case in point. He finds himself without facilities because loan funds are not .available for the full amount of road-making that is desired. Yet those who represent the people, whether it be in the local government or the federal sphere, are constantly confronted by the newspapers with stories of heartbreak streets, although the newspapers know perfectly well that it is not possible for the local authorities to do anything about the matter, because the loan moneys that they receive in any one year are determined by the Commonwealth and the States, meeting together in the Loan Council.

The family man, therefore, finds himself in a most invidious, position. He cannot pass anything on, as other people can, who feel the pressure of inflation. Due to lack of planning, it is possible that inflation may get out of hand. If it does, the family man will lose everything that he possesses. That happened to great numbers of family men in the not far distant past.

Amongst those who have suffered severely are the people who receive payments of one kind or another under the social services legislation of this country. Those in receipt of child endowment can expect no relief of any kind from this budget. A meagre additional sum has been allocated to the pensioner classes. Some .of the people who come under that heading -are in dire straits, especially single pensioners, who are striving to maintain their own quarters, and widows whose last child reached the age of sixteen years before the widow reached the age of 50 years. I want to dwell on this point for a moment. I contend that the pensions paid to widows with families should be raised sufficiently to permit them .to give full protection to their families. I mean that a widow should be able to devote as much time to her family as she would have been able to do if the bread-winner had not passed away before the family reared.

Many war pensioners, too, are facing .great .economic difficulties. My party appreciates, as our leader pointed out when he made his speech on the budget, that the pensioner classes have been a political football, kicked around and buffeted by every .economic emergency. We say that that should cease. I think that most honorable members on the Government side of the chamber will agree with our view. It is a very bad thing to see returned servicemen coming to Canberra year after year and doing as much lobbying as possible in order to get a reasonable pension standard proclaimed for them when the budget is presented. It is devastating to see busloads of pensioners arrive here to indulge in a practice which seems to me to be somewhat undesirable - the practice of attempting to apply pressure to individual members of the Parliament in order that each member, feeling that his position is becoming somewhat insecure, will in turn try to apply some pressure to the Ministers who have to decide what the budget shall contain. We believe that this matter should be separated from politics altogether; but until such an arrangement is made I support the pensioners’ demand, without any equivocation at all, for a pension equal to half the basic wage. However, I believe the subject demands scientific treatment and that, at least, the pension should be based on the minimum needs of the pensioner. The first item to be covered is food, taking into consideration, of course, costs and types of food essential to the aged, invalid and others in the pension class. Other items that should be -considered are clothing, shelter - which might involve rent and home-ownership maintenance - hospitalization, a knowledge of the incidence of sickness, type of indisposition and treatment that is generally required by various classes of pensioners. Those are amongst the subjects which should be thoroughly and carefully examined. Half of the base rate is not the scientific way to deal with the subject; but, as I have said, I support that method until such time as the Government determines a better method. It is quite undesirable that pensioners should form themselves into a union to present a case to the Arbitration Court. That would be involved in a demand for half the basic wage, and, of course, the Arbitration- Court in such proceedings- should take into account the amount of money that is- available for distribution in the community.


– That is a. silly one.


– I am- not in agreement with that. I say that it would be undesirable for the pensioners to form themselves into a union to present a case to the court. I believe the answer would be the appointment of a royal commission to examine the- actual needs of pensioners based on expert evidence from medical men, dietitians, and commercial, economic and costing specialists. A factfinding royal commission, with power to call evidence and report back to whatever government may be in power would be the best way of assessing, the actual needs of these people. That would be the proper method of examining this matter. We adopt that approach in relation to ourselves. In the case of the pensioners or other recipients of social services we should approach the subject scientifically by finding out what are the needs and by giving to each according to his or her needs. Child endowment, for instance, has been dealt with most unscientifically. Soldiers’ pensions also should be determined more scientifically;- and the same observation- applies to age, invalid and widows’ pensions. What I am attempting to stress is the need for a fact-finding tribunal. This subject, of course, will be further discussed as we have already forecast an amendment in relation to this matter. I hope that our amendment will receive sympathetic consideration by the Government when it. is placed before the committee.

In conclusion, I say that while time is with us one might dare to hope thar the Government will plan to keep our economy so balanced that full employment can be maintained and. prosperity so regulated that we shall continue to expand freely by natural means and by the desirable immigration, predicted in this budget. The Government has a very grave responsibility. Above all, its plans should realistically envisage the lot of the family man and those dependent on welfare payments in the form of endowments and: pensions; I say most emphatically that there is no real wealth where tin young- and the weak, are isolated and forgotten-.

England · New

.- Whether we agree with the last speaker or not, he at least made a thoughtful; contribution to the debate and put forward, from, his point of view, some excellent, and constructive suggestions. It is rather to the point that I should have heard somebody from the Opposition benches, even from the AntiCommunist Labour party, bring forward constructive suggestions during- this debate.. It- has been reasonably clear that from the Leader of the Opposition (Dr. Evatt) downwards there has been precious little advanced that has been constructive and helpful in the important matters which are- now before the committee.

The Treasurer (Sir Arthur Fadden’ is to be commended for the budget which he has brought down on this occasion, and I trust that before I have finished my address I shall have given reasons for holding that opinion. The budget recognizes that we are at a certain point of re-adjustment, not only in our own affairs, but also in the international crisis. The budget also recognizes, as the honorable member for Darebin (Mr. Andrews) mentioned, the claim of the pensioners. The Government has done as much as possible, and more than previous governments have done, in assisting those who are largely dependent upon pensions; but it must be realized, not only in this House but also outside of it that the raising of the pension rate also increases the number of persons eligible to receive pensions. The number includes not only the group of persons who have no income other than their pensions, but also another group who have other income as well. They, too, will benefit by this rise. I would say that at present the outstanding feature of our political life, as has been demonstrated in this chamber, is an almost complete lack of leadership on the part of the official Labour Opposition. Theirs is a curiously muddled outlook upon the whole of everything, which is reflected unfortunately in many respects by the complete disorganization of their political set-up. We have seen the internecine strife that has torn them to pieces ; it left only a small remnant upon the benches last night. Their differences are reflected in the confused counsel that they bring to this chamber. I personally cannot see how any great party can make a contribution to the political life of this country if it is torn to pieces within. It may be, and sometimes is, that in the nature of things a party must re-form or die, and it would appear that the chances of the great Australian Labour party dying under the present auspices are exceedingly strong. I hope honorable members opposite have paid their insurance premiums! I make these observations with some regret, because 1 believe that in the British system of parliamentary government, which we have in Australia, a most important essential is a vigorous opposition, well and wisely led. By “ opposition “ I mean not a body of men ready to try to tear everything to pieces - whether it be good, bad or indifferent, under the impression that that is the duty of the Opposition, but a body of men who constructively approach the problems of the country aud justify by their leadership and by their following the claim that they will exert some day to become the Government. To use the words of a great Dutch leader, Jan Smuts, many years ago, it is essential to the British parliamentary set-up that there should be not only a good opposition but also an opposition within the Government parties in order to keep Ministers up to the mark. This observation is more apt to be appreciated by the students of constitutional law than by the Ministry itself. Having had some slight experience in that direction, L am qualified to speak on the subject.

The outstanding fact that I have found in Labour’s approach to the questions that affect this country has been a tendency to knock everything that appears to be ultra-successful. I refer to the important matter of production, and the running of the country successfully from a financial point of view. That is fi most extraordinary and destructive attitude; it is a hangover from the days when many men engaged in primitive industrial warfare. It is a heritage which the Labour party appears to have cherished to itself when everything else has practically slipped from its control.

I shall cite one or two illustrations to make clear my point of view. There was recently published the balance-sheet of a great Australian company, General Motors-Holden’s Limited. I regret to say that not only the members of the Labour party but also certain other illinformed persons rushed in to condemn this undertaking, which has been one of the most successful in the whole of the industrial life of Australia. I stand here, not as an advocate of big business, but as an advocate of sound business, whether it be big, little or otherwise. The report that accompanied the balance sheet could be read with advantage by everybody. If honorable members opposite could prove that that enterprise had been sweating its employees, had not provided them with proper amenities, worked them longer than award hours, and had tried to destroy their wage standards, I should be the first to say that the laws of Australia should be invoked against it. But the pay-roll of the company has risen from about £1,500,000 in 1939 to almost £12,700,000 to-day. For the 12,909 employees of the company, it aggregates almost £12,700,000, or an average payment of about £900 for each employee.

I consider that there is something utterly wrong with a philosophy which demands the tearing to pieces of an enterprise which is making tremendous profits for Australia. I should say that I do not drive a Holden motor car, nor do I own shares in the company, but J have pride in what Australian workmanship, aided by good leadership, can achieve. There is something extraordinarily weak and defective in the outlook of our people if their leadership on the industrial side can do no better in this Parliament than to try to knock such a great enterprise. When one looks at the enormous range of products which are manufactured in Australia for this enterprise, in order to make possible its production of a modern motor car, one gets a new idea of the great range of employment so provided.

I come now to another great Australian enterprise, the Broken Hill Proprietary Company Limited. A great deal has been said about monopolies, and 1 myself have voted in favour of a measure designed to deal with monopolies which act in restraint of trade. No member of the committee has been able to challenge this company’s conditions of employment, or its rate of development. It is true that it has not been able to keep quite abreast of the demands that have been placed upon it by our rapidly expanding enterprises, but I remind the committee that the company has recently spent £60,000,000 on an expansion programme, and it has now embarked on further development and expansion of its plant, estimated to cost another £60,000,000. As this great organization provides the community with the cheapest iron and steel in the world, I consider that there is something incredibly wrong with a philosophy that seeks to knock it. Let us compare that company with the New South Wales railways and transport system, which incurred a loss of £6,000,000 during the last financial year. Persons who criticize the Broken Hill Proprietary Company Limited would be better employed if they poured the vials of their wrath on the ineffective and weak management of the New South Wales railways, which has penalized the primary producers and other persons by increasing freight charges. Public money to the extent of £6,000,000 needed to balance the railways accounts should be available for the construction of schools and other urgent public works. If the critics of the Broken Hill Proprietary Company Limited were to attack the weakness that is shown in that particular case I could sympathize with their point of view. But in their estimation, it is apparently more meritorious for a big enterprise to incur losses than to make profits. I once travelled with the late Sir Herbert Gepp, who put his finger on the whole trouble when he said -

The Australian workman is the finest workman in the world if he is well led, but if he is not well led he is the worst pain hi the neck imaginable because he is too intelligent.

The reason why State enterprises are falling down in many cases is because men are not well led. I remind the committee of what was said by the contractors who recently finished the Shell contract. They used these words -

We absorbed 25 per cent, increase in wagesand we finished ahead of schedule. We pay testimony to the men who worked for us - they were the finest workmen in the world.

It is time for the great Australian Labour party, for other people also, to put aside the practice of “knocking”, and really get down to the business of developing better team-work in this community by fostering good leadership and loyalty.

Sitting suspended from 5.56 to 8 p.m.


– Before the suspension of the sitting I had been referring to the consolidating character of the budget. Honorable members will recall that I had referred to the very sound way in which the budget had been conceived and drafted, having regard to the conditions that have obtained in the national and international markets for some time past. Although I believe in consolidation, I should like to say, in passing, that, when one looks at the figures for the tourist traffic, one finds a gap of £20,000,000 between the amount that Australia pays in travel overseas and that which we receive into Australia. Having regard to the remarkably fine natural tourist attractions that we can offer to people from other parts of the world, I feel that we might reasonably consider expanding our tourist trade, with consequent advantage to our national income. But before that is done, we must do something about improving our tourist facilities which, speaking from my own observation of tourist facilities in other countries, on the whole are of a very low standard indeed. There are very few hotels in Australia that measure up to the international tourist standard. I am not speaking of millionaire hotels but the normal tourist hotels. It seems to me that we could make improvements in that direction with considerable advantage.

Although I should like to continue discussing that subject, I wish to refer to my earlier statement that I would justify my commendation and support of the consolidating budget that the Treasurer ha? presented. Australia is faced “with a dilemma. We produce a great deal for export. Tie value of our exports in the year 1953-54 was approximately £827,000,000. Australia has very big commitments. It is endeavouring to build up its national strength by immigration and is developing in many ways. It must have assistance from overseas to strengthen its economy. We are faced, on the .other hand, with the fact that, as .a primary producing and exporting nation - and every authority agrees that for a long while to come we must depend mainly upon our exports of primary products - Australia is in competition with other nations, and there is a tendency for our export markets to drop. The most serious drop, of course, has been the drop of approximately 30 per cent, in the value of our wool within a short period of lime. Over 90 per cent, of our exports consist of either the products of the land or partly processed products of the land. So, there is thrown upon us the difficulty of maintaining an economy in which we are speedily building up secondary enterprises of which we have every reason to be proud, and at the same time maintaining our income from primary production within our own borders without destroying our capacity to export overseas.

At the present time, we are confronted with the effects of the changing age. We are at a point of time after World War II. which corresponds to 1929-1930- eleven years after World War I. From 1,918-19 to 1929-30 there was, on the whole, considerable prosperity in primary industries, and a wide development of secondary industries. Towards the end of that period, however, we came up against an immovable barrier which resulted in economic collapse, not only for this nation, but also for the other nations of the world generally. Now, ten years after the end of World War II., we are meeting precisely identical factors to those that existed at a corresponding period of time after the end of World War I., and for precisely the same reason. During World WaT I., there was a tremendous expansion of primary and secondary industries in such countries as Canada, the United States of America, Argentina and Australia, which were not so much affected by war and ‘whose ‘economies enabled them to expand. ‘On the other hand, there were countries like Germany whose economies were largely destroyed. Eleven years afterwards, the primary, secondary and tertiary production of those countries whose economies were damaged or partially destroyed gradually picked up, and there was an overlap. At that time there was not very much wisdom in the world, but an intense amount of selfishness and a stupid adherence to the doctrine of laisser-faire. On that occasion, the great United States of America held out for the last penny from its creditors, the main creditor being Great Britain, and thus helped to precipitate a crisis: but since World WaT II., with wisdom and generosity, the United States of America has poured countless billions of dollars into other countries of the world, not only to prop up the partially destroyed economies of those countries, but also to help its allies.

If we look closely at the conditions that obtained in 1929-30 and those of 1954-55, we find that the parallelism is not quite as black as it seems, first, because the nations understand something of the problem and, secondly, because they are desirous of avoiding that human misery which could result only in the collapse of our whole structure and the inpouring of the tyrannical doctrine of international communism. I do not fear that there will be a collapse, but I do fear that the time lag that has characterized our actions at various other stages may affect us -on this occasion. Let me explain what I mean by a time lag. Those of us who lived through the terrific depression of the 1930’s - some of us in government - and saw the misery and the difficulty associated with it are concerned when we note that, when the depression was over and when World War II. had reached the stage at which Australia could have concentrated on its production and the development of its markets abroad, there was a time lag for which the advisers of a former Labour government were responsible. Acreages were restricted at a time when the world was threatening to tear itself to bits through starvation. T shall not dwell upon that, except to say that there is a lesson that we can learn. The men who were affected :by the depression complex are likely to be paralleled <by the people who have been affected ‘by the post- war prosperity complex. That post-war prosperity -complex is likely to make all leaders in this community - industrial, commercial,- administrative and trade union - fail to face up to the fact that we have arrived at the stage of the overlapping of economies of countries which have over-expanded their economies, both primary and secondary, and those which had their economies destroyed but are now coming into full production. who sees the Volkswagen scooting about our roads in hundreds must realize that the German economy has attained that position. A few years ago we -could import only a few English ears. If we are to succeed in handling the problems which surround us, we must be prepared to face up to certain things winch I see looming before this country.

I nave nothing ;but praise for the policy of the Government in relation to past and present problems of primary production. The Government has endeavoured to’ encourage primary production in every way. It has done so by granting tax concessions, and by taking 60 items completely out of the capital expenditure list so as to encourage such things as pasture improvement. It has placed 50 items on the list of equipment to which a flat depreciation rate of 20 per cent, is applicable, thus enabling those items to be written off in five years. It has given great assistance to primary producers through the Commonwealth Scientific ,and Industrial Research Organization. By means of its work on myxomatosis, the Commonwealth Scientific and Industrial Research Organization has saved primary producers millions of pounds of production that would have been destroyed by rabbits. On Common-wealth Scientific and Industrial Research Organization activities in the past year, the Government has spent about £3,400,000, a great part of which has been expended on problems associated with the land. The Government has sent its representatives to the conference in Geneva on the General Agreement on Tariffs and

Trade and has succeeded, not only in assisting secondary industries, but also in preventing the disposal of the surplus produce of primary industries in the United States of America and elsewhere to our detriment. The Government has given us the Colombo plan, which is a means of raising the standard of living of our fellow men overseas. The Colombo plan is morally right and. in the final analysis, it is economically right, because millions of people in South-East Asia cannot possibly buy our goods unless they have a standard of living which will enable them to trade with us.

The Government, in many ways which time will not permit me to traverse, has done an immense amount for the man on the land. The latest costofliving figures indicate that the price of practically every basic foodstuff, such as milk, butter and potatoes, has risen. An authoritative United States of America publication states that the best way of using excess agricultural production is for the people to consume more milk, eggs, and live-stock products. I suggest that whilst we have not yet reached the point of crisis, this country may yet have to face up to a policy of reducing prices of primary products and, at the same time, paying a subsidy in order to keep incomes from primary production on the same level as incomes in the rest of the community. Once incomes from the land are allowed to sag, all other incomes sa,g with them. An authoritative overseas publication states that the sag in manufactures and business and increase in unemployment in Canada - the greatest since the war - has been caused through die sag in farming incomes. I am not. putting forward a sectional argument. I am simply putting forward a proposition which is accepted by the Government of the United Kingdom, which is subsidizing primary producers by the amount of £2S6,000,000 this year. ‘ That policy is enabling the United Kingdom to obtain increased production, build up its economy, and buy .our production at a price that enables it to equalize its costs.

I commend the Government for this budget. I commend it for its policy in the past. But I warn the Government, the House, and the country against allowing the time lag to overcome their discretion and judgment as to what should be done.


– The honorable member for New England (Mr. Drummond) did not seem to regard the national economy with quite the same degree of optimism as was displayed by the Treasurer (Sir Arthur Fadden). It appeared that the Treasurer was not quite sure whether the country was at the end of a boom, or the beginning of a slump. He seemed to know that we had come to some difficulty, but he was not sure in which direction he should move. Therefore, instead of being decisive and taking action, he merely exhorted. He offered no concrete solution, but suggested that perhaps people should reduce their consumption. We on this side of the House say that it is rather presumptuous to suggest that the average wage-earner, who has to bring up his family on £16 or £17 a week, is overspending. When the Leader of the Opposition (Dr. Evatt) delivered his speech on the budget, he made that point very clearly and definitely.

If the Treasurer wished to address moral exhortations to the community, he should not have addressed them to the community at large. He should have addressed them to particular sections of the community. The Treasurer cited certain figures from that very important document which is presented in this House every year with the budget, the White Paper on national income and expenditure. It has been refreshing to note the honorable members who have given some attention to that document on this occasion realizing that it displays on a broad canvas the economic picture of the whole of Australia. Unfortunately, it does not present the picture for the coming year; but at least it does present a picture of the past year, which ought to give us some clues for the future. The White Paper on national income and expenditure is a statement, on the one hand, of what the community ,as a whole receives in various categories and, on the other hand, of what the community as a whole expends. The central issue of the budget speech was the statement by the

Treasurer that, at the end of the financial year, we had around us the unmistakable signs of inflation. He went on to draw the conclusion, apparently, that perhaps we - meaning the people at large - would have to be a little more careful in future than we had been in the past. Let us read the speech more carefully, particularly the following statement: -

This most formidable upsurge of spending has been facilitated by a far too generous expansion of credit on the part of the banking system together with a rapid growth of hire purchase finance.

I submit that if this document is considered realistically it will be found that the blame for the inflationary situation cannot be laid at the door of the wage-earning section of the people; it has been brought about by the imbalance that exists between consumer spending on the one hand and investment expenditure on the other. I think it was the honorable member for Paterson (Mr. Fairhall) who this afternoon stated that there must be a partnership between industry and labour. That expresses the situation perhaps rather glibly. But what kind of partnership is it which exhorts the wage-earner to increase productivity and then, by the processes of our wage adjudication system, gives him little or no return from that increase of productivity. Of course, we realize that there must be a certain amount of investment all the time in the community, and there must be a certain amount of consumption. In fact, I think most economists argue - although they sometimes obscure the position a little - that it is consumption basically which sets the tempo of economic activity. Investors and business people do not go into business primarily from altruistic motives, but because they expect to get not only a living, but also a profit from their activities. But by and large, in any community, the greatest share of expenditure must be the share of consumption, and again that is borne out, so far a= Australia is concerned, by the figures which are supplied annually in the White Paper. I direct the attention of the committee to the summary of tables which is contained at the end of that document. Table No. 7 is headed, “Relationship of main aggregates”. The table indicates that expenditure is of three kinds - expenditure on goods and services, in which public authorities and financial enterprises are shown together; expenditure on personal consumption; and a figure which is called “ gross private investment “. In 1952-53, which was the year that the Leader of the Opposition took for the purposes of comparison, the total of these various items was £3,947,000,000, of which personal consumption accounted for £2,545,000,000, or 64.5 per cent, of the total aggregate expenditure. It is arguable, of course, whether or not there ought to be more expenditure on consumption and less on the other categories, but, at any rate, in that particular year that was the figure of expenditure on consumption. For the year just concluded, however, the aggregate amount of the national income had increased from £3,947,000,000 in 1952-53 to £5,005,000,000. I am not citing here figures relating to what is called the “ gross national product “, because they are the figures which indicate the total expenditure expressed in the final prices of goods coming on to the market. They include allowances for depreciation and indirect taxes, which are not included in the figures sometimes used. I am using the figure of gross domestic expenditure because it shows the various components. The total had risen from £3,947,000,000 to £5,005,000,000. Instead of expenditure on personal consumption being £2,545,000,000, it has risen to £3,110,000,000. That amount, expressed as a ratio of £5,005,000,000, is 62.1 per cent, of the national income. In other words, the share going to personal consumption has declined during the past two years. This morning I read in the Sydney Morning Herald an article which conveniently took the figures back four or five years for comparison. The point [ am trying to make is that, in the past two years, because of the failure of the Government to control the economy, whilst the aggregate product expressed in money terms has risen, and to some extent the aggregate product expressed in physical terms also has risen, the share of that expansion going to the consumer has declined. I would suggest that anybody with any gleanings of his tory ought to be at least a little alarmed when the proportion of expenditure on consumption is declining. I think a further indication of that decline is seen in some of the figures which accompany the budget, particularly the figure which relates to what is called “ non-farm stocks “, which indicates the amount of unsold goods in the factories and on the shelves of the shops at the end of a particular year. There was a decline in 1952-53 because, as honorable members will recall, that was the time when import restrictions were in force, and a time of recession of a kind. At any rate, the figure during the year just concluded has increased by £120,000,000, which would seem to indicate that people are finding it a little more difficult to sell goods to-day than they found it a year or two ago. The indicator is borne out also by one of the statements supplied by a trading bank, the National Bank of Australasia Limited, which publisher what is called an “index of business activity”. The last available statement on that index is contained in the monthly summary of the bank for July, 1955, and indicates that that index has undergone a levelling-out process in recent month?. These seem to me to be signs of a condition about which the Treasurer should take some action. He ought at least to display a little interest in them. Instead of doing that, however, he points moreor less to the cause, and says that bank advances have increased more than they ought to have done. He also points in the direction of hire purchase transactions as a cause. It is here that we have to see this problem of the national economy in a broader prospective than the mere budget itself. The budget is only one aspect of Australia’s economic policy. Monetary policy is another part of it. and our international trade is still another part of it. Both have within them matters which require an amount of attention on the part of the Treasurer which he does not seem to be giving to them.

I wish to use the limited time that remains to me to say something about the monetary side of the economy. I think that perhaps at this point the position could be summed up by saying that, so far as the balance between investment on the one hand, and consumption on the other, is concerned, whilst there is an increase overall in terms of money; there has been a maldistribution against consumer spending in favour of investment expenditure during the past two years. That does not mean, as some honorable members on the Government side have implied, that the Labour party is against investment. “We say that the important matter, from the viewpoint of the citizens, is that a just and proper balance should be maintained between investment expenditure and consumption expenditure.

If any moral lessons need to be read by the Treasurer, they should be addressed to those concerned with investment expenditure, particularly with the part of that expenditure described as gross private investment. If we examine the figures we shall see that there has been a greater proportionate increase in private investment than in expenditure by public authorities. At a time when we are not sure whether we are at the end of a boom or at the beginning of a slump, it is alarming to discover that, due largely to the financial policy of this Government, public works have reached almost a state of paralysis. Many public works are- being undertaken, but less money is being expended now than at any time during the last two or three years. In a country like Australia where the pattern of development must provide for the increase of power, transport and irrigation schemes in order to increase our ultimate living standards, and when reliance is placed on the Government to ensure that that development shall continue, it is alarming to discover that the emphasis is on private rather than public investment.

The emphasis to-day is on investment for private profit rather than for public good. That does not mean, of course, that investment for private profit does not sometimes yield public good, but, nevertheless, there is too much reliance on private investment and not sufficient emphasis on planning the development and use of our national resources. We are now at a stage in our economic life when we should be doing some stocktaking. The Treasurer has, through the Commonwealth Bank, which operates as a central bank, certain overriding powers. I suggest that he should, always remember the preamble which appears every year to the annual report of the Commonwealth Bank. It reads -

It shall be the duty of the- Commonwealth Bank within the limits of its powers to pursue a monetary and banking policy directed to the greatest advantage of the people of Australia. . and to exercise its powers under this Act . and the Banking Act 1045” in such a maimer as . in- the opinion of the Bank, will best contribute to the stability of the currency of Australia the mainten ance of full employment in Australia . and” the economic- prosperity and welfare of the people of Australia

The Treasurer pointed out in his budget speech that the present upsurge of spending was largely due to a too generous expansion of credit by the banking system. If there has been too great an expansion of such credit, whose responsibility is it to ensure that it shall be checked ? If the last annual report of the Governor of the Commonwealth Bank is read, it will be seen that in the year under review bank credit expanded by about £115,000,000, and that this disturbed the financial balance of our economy. During the- last financial year, advances by the private banking system have increased by even more than in that year.

The Treasurer spoke with great unction when he said that the Government had reduced the issue of treasury-bills, but 1 suggest that to look only at the amount of treasury-bill’s current as a guide to the state of inflation of the currency is to take a very narrow view. There is no essential difference between the Government issuing £1,000,000 worth of treasury-bills, which are devoted to a proper public purpose, and the banking system making credit advances of £1,000,000 to be used for private purposes. The important point to be considered is whether the public service performed by the Government is of more importance than the private undertaking performed by the use of bank, credit. The Treasurer should consider that. All that he said was that he had not expanded credit, but that the. banking system had.

It is strange that sometimes in order to get a guide to Australian conditions we have to find it in an- overseas publication. I have before me an article published inan. influential overseas journal! called The

Banker. The issue that I refer to is dated June, 1955, and the article on monetary policy and Australia’s deficit was written by J. 0. N. Perkins, who is attached to the Australian National University. Mr. Perkins stated that because of the amendments made to the special account procedure in 1953, the central bank had less control over the monetary destiny of this country to-day than before the amendments were made. I remind honorable members that that was the viewpoint expressed on this side of the House when the relevant legislation was before the Parliament. The author indicated that because of our dependence on export trade - it must be remembered we do not determine the volume of our wool clip and our wheat crop, or the prices of those commodities - there could be a grave degree of instability in the Australian economy. He said that, because of that instability, it was necessary that there should be adequate monetary and banking control, and he gave three reasons why that control has been made more difficult than it should be.

One reason is that in Australia the private banks do not apply a consistent policy with regard to liquidity. I do not intend to explain the meaning of the term “liquidity”, but I know that many honorable members will understand it. The banks do not have any definite ratio of liquidity, and may allow deposits or advances to rise or fall; not according to a pattern, but quite indiscriminately. The second reason that the writer of the article mentions is that apparently in the import restriction period the banks discovered that they could approach the Commonwealth Bank and get assistance when, because of their own policies, they had fallen into a difficult position. Apparently, if the same thing should happen again, the private banks feel that if they get into a mess the Commonwealth Bank will come to their assistance.

The third reason for the inadequacy of our present monetary control is the legal limitation on the extent to which deposits with the Commonwealth Bank can be called to the special account. The author said -

The bank’s existing powers in that respect were, in fact, nearly exhausted during a brief - [13] period in 1954 (and that may just possibly even have caused it to make releases that the economic situation did not justify).

I suggest that that is a very serious situation. Apparently, at one stage in 1954, because of the limitations placed on the operations of the central bank acting as a remedial agent to adjust the monetary affairs of this country, it so happened that the central bank could not prevent the private banks from doing things which were dangerous to the overall economic health of the country. I suggest that we seem to have got to a similar stage again to-day. The real evil is that private banks on the one hand, as the financial agents, and huge profit-making undertakings, are allowed to operate unchecked in this country, not for the general welfare but for the benefit of the few. That situation was discussed by the Leader of the Opposition. He pointed out how company profits had risen from £378,000,000 to £505,000,000. It is all very well for some people to say that, in the same period, consumer expenditure had risen by a greater amount. They lose sight of the point that consumer expenditure is everybody’s expenditure, while company profits are limited to only a very small section of the community. What they are doing, because of the failure adequately to check their profits, is to divert the economic resources of this country, not primarily to the general improvement of the people as a whole, but to economic development, as they see it, which may or may not be to the general interest. It is fatuous to suggest that because wages, which go to from 85 per cent, to 95 per cent, of the people, have risen by £200,000,000 and profits have risen by only £127,000,000 there is no injustice. There is an injustice, because one is the broad category that applies to everybody, while the other is limited to only a very small proportion of the population. As an Opposition representing the working people of this country, we say that our primary aim is to secure the greatest degree of justice for the greatest number of people. At the moment, that is not being done in Australia.

The amount of consumption proportionately is falling, and that, in itself, is an injustice. It is all very well to say to the wage-earner, “You can only get higher wages if you produce more “. He produces more, but he does not get a proportionate benefit. How can one expect any kind of proper impulse if that is to be the pattern and order of things? It has been pointed out that productivity has risen by approximately 22 per cent., but the share going to the wage-earner has increased by only 7 per cent. Is it just that less than one-quarter of the population should get three-quarters of the cream while the other quarter of the cream has to be shared by the bulk of the population ?

We believe it to be sound policy to regard declining consumption as a danger sign, because consumption is the impulse in any economy. When consumption is declining, the Government ought to do something about it. The Government cannot directly alter the wage system for the time being, but it could alter the amount of national income that is received by the most needy section of the community. The Government could also increase pensions. It is all very well to claim that the proposed increase of pensions to £4 a week represents a certain proportion of the basic wage. That should not be the guiding factor. If people are honest about this matter, they should not relate the pension to the 0 series index. They should relate it to the food component only of the C series index, because the pension has become so small that it barely provides for subsistence. An examination of the index figure shows that the prices of food and other necessaries have risen by more than that in the aggregate. To say that because the pension is a certain proportion of the basic wage justice has been done, is to overlook facts. The honorable member for New England has suggested that the consumption of eggs, milk and butter in this country be stimulated. I can suggest no better method than to increase the pension on the one hand, and child endowment on the other hand. If expenditure is directed along those lines, the Government need have no fear that the money will go into wasteful channels. The money will go to people who do not need to be told how their children should be brought up, or how the payments should be expended.

That is something which, in our opinion, ought to be done, and for that reason, our leader has moved the traditional amendment for this occasion - that the item be reduced by £1. This amendment invites the committee to express want of confidence in this Government, and in the Treasurer in particular, because of their inaction in the face of the crisis which seems to confront the Australian economy.


.- The honorable member for Melbourne Ports (Mr. Crean) and I happen to be colleagues on the Public Accounts Committee. I am pleased to say that we have never had a disagreement on any report that has been issued, but I am afraid that it would be impossible for me - and probably it is impossible for any honorable member on this side and, I think, many honorable members of the Opposition - to agree with some of the statements he has made to-night. I wish to direct my attention for a few minutes to three or four points in his speech.

The first point - and it seems to be a song on the part of the Opposition - relates to the consumption of goods within the community. The Treasurer (Sir Arthur Fadden) made reference to this particular matter in his speech, and pointed out that personal spending on goods and services rose last year by 9 per cent. Members of the Opposition, including the honorable member for Melbourne Ports, suggest that such is not true. They go even further, and say that there is no excess spending within the community. I think it will be very difficult to convince the public of Australia that there are many people, if there are any people, who are in want at the present time. To give some indication of existing conditions, I refer to another line or two in the Treasurer’s speech, as follows: -

Consumption of beer, which last year reached the heroic total of 219,000,000 gallons is expected to increase still further in 1955-56.

He proceeded -

Sales of tobacco and cigarettes are also likely to increase.

I ani not interested at this stage in what might happen this year in relation to the increase. Let us consider the position so far as it relates to last year. The quantity of 219,000,000 gallons of beer represents, for every man, woman and child in the community, a total of 24 gallons. After those facts were given, one of the Sydney newspapers made a calculation, and pointed out that every husband in the community is spending, on the average, no less a sum than £2 15s. a week on beer and tobacco. For honorable members opposite to suggest, after having heard those facts, that there is not excess spending in the community would stagger most people. “When we add to that bill the spending on gambling, lotteries, &c, we find evidence of a tremendous excess of spending on things other than what are essentials for the community at the present time.

The second point that the honorable member for Melbourne Ports has raised is the maldistribution between investment expenditure and consumption expenditure. Once again, I believe that it relates to the first point I made. I am of the opinion that such a large investment expenditure in the community is a clear indication that people are prosperous, that they have an excess which they can invest in the community. The honorable member for Melbourne Ports also said that company profits are the property of a very few people. That statement is just ridiculous because company profits to-day belong to a very large proportion of the masses of the people. Any person who knows anything about the lists of company shareholders knows that there are thousands of Australian citizens who have small holdings in public companies and benefit from the dividends paid by those companies.

Mr Edmonds:

– Rot !


– It is clear that the honorable member for Herbert (Mr. Edmonds) does not understand these matters.

The honorable member for Melbourne Ports criticized what he called the lack of control of the banking system. About a month ago I examined this subject of finance by the banking system, and I found that the banks still advanced money on much the same principle as they have done for a number of years. It can be accepted as a general rule that the banks advance money up to approximately 60 per cent, of the deposits that they hold. There has been very little variation of that practice in recent years - not more than about 1 per cent, or 2 per cent. That has been the policy of the banking system for some time, and it is the policy in operation to-day. I know that there have been heavy demands for increased overdrafts, or increased advances to the business community, but I also know that it is the practice of the banks not to make advances if they are required for capital purposes, but that they will make advances to meet fluctuations associated with the purchase of consumer goods. It takes a little time for the full effect of these demands to be felt within the banking system, and it also takes time for them to be completely sorted out and placed on a satisfactory basis.

Having made those remarks in relation to matters mentioned by the honorable member for Melbourne Ports, I now desire to direct attention to some other matters contained in the budget. At the beginning of a speech in the course of a budget debate which may last for two or three weeks I think it is not a bad idea to remind honorable members generally of what really is in the budget. I, therefore, propose to summarize some of its provisions. I shall do so, first, in relation to the revenue and expenditure mentioned by the Treasurer (Sir Arthur Fadden). In the figures that I shall cite I shall disregard income from business undertakings. In my opinion, it is not entirely correct to regard the purchase of a postage stamp as representing real revenue of the Commonwealth for the purpose of this comparison, because the payment of money for a postage stamp is payment for a service rendered to the community by the postal department. Last year our revenue totalled £976,000,000. I am giving only approximate figures, not the actual figures. This year the revenue is estimated at £1,025,000,000, an increase of £49,000,000. Expenditure of a revenue nature last year” was £802,000,000 ; this year it is expected to be £875,000,000, an increase of £73,000,000.

That deals with the revenue items. The surplus before coming to capital workswas £173,000,000 last year; it is expected to be £149,000,000 this year. On capital works we expended £96,000,000 last year, compared with an estimated expenditure of £.104,000,000 this year, an increase of about £8,000,000. Our surplus last year was £78,000,000 of which the Treasurer has indicated that £40,000,000 is to be used to assist States’ works programmes and £30,000,000 to redeem treasury-bills. This year the surplus is expected to be £45,500.000 after we have redeemed war savings certificates and from which will be paid £3,500,000 for wheat storage and £8,500,000 for war service land settlement. The expected increases of revenue items include income tax £44,000,000, excise £16,000,000, sales tax £5,000,000, pay-roll tax £5,000,000, and estate duty £1,000,000. Among the reductions were £13,000,000 customs duties, and £9,000,000 in respect of other income.

On the expenditure side the principal increases are in connexion with the national welfare fund, £29,000,000, payments to the States £21,000,000, defence expenditure and services £12,500,000, and other items £15,500,000. There were reductions of £5,000,000, principally in connexion with bounties and subsidies. If we keep the overall picture in our minds, we find that revenue is expected to increase by £49,000,000, and expenditure by £81,000,000, including the redemption of war savings certificates. This year’s surplus is therefore estimated at £45,000,000 compared with £78,000,000 last year. The Treasurer also indicated that a proportion of our surplus this year may be used to assist the States’ works programmes. I believe that those figures give a clear picture in relation to this year’s budget.

In his speech the Treasurer raised two important problems in connexion with the economic position of Australia. First, he dealt with our overseas fund and, secondly, he referred to the inflationaryconditions which he said were developing within the community. I propose to say a few words in relation to those two subjects. The position in relation to our overseas fund arises from a lack of balance between our exports and our imports. We are spending more on imports than we are receiving for our exports. The corrective would be to reverse the present situation, but that cannot easily be done with such matters as defence. Our real problem was mentioned by the honorable member for New England (Mr. Drummond) when he said that the position would be greatly improved if we could increase our exports. An examination shows that 90 per cent, of our exports consist of primary products and 10 per cent, of secondary products. Because of existing world conditions, it would appear to be impossible for Australia to increase its export income greatly within the next twelve months or couple of years, particularly when we bear in mind the report which appeared in this morning’s press that wool prices had depreciated by 33 J per cent, compared with the prices ruling at the beginning of the wool selling season in August last year. I think honorable members generally will agree that there is little prospect of increasing the volume of our exports of secondary products. This afternoon, the honorable member for Ryan (Mr. Drury) gave certain figures which suggested that Australia would have to increase its exports of secondary products by from £150,000,000 to £200,000,000 to remedy the lack of balance between our imports and our exports. I am sure no honorable member believes that, in the foreseeable future, Australia’s exports of the products of secondary industry will increase by between £150,000,000 and £200,000,000.

We are in a position similar to that of a man earning £15 a week who tries to live at the rate of £25 a week. Something must happen. Either he must draw on his savings or he quickly finds himself in a very unfortunate financial position. He must get his personal expenditure under control. Australia - and I mean not only the Commonwealth Parliament, but also the State parliaments and all persons in the community who control the spending of money - must do as the individual must do, and get its spending under control. Simply, we must bridge the gap between exports and imports. I am not satisfied with the Government’s approach to the problem. The Treasurer has indicated, and every honorable member knows, that something in the nature of import restrictions exists. I give it as my considered opinion that if we are to achieve a balance between our exports and our imports we shall have to be more drastic with our import restrictions than we are at the present time.


– I thought the honorable member did not believe in controls.


– The honorable member has raised exactly the same point that was raised by the honorable member for Melbourne (Mr. Calwell) last evening when he stated that we on the Government side of the chamber do not believe in controls and that we hold the view that any one who does believe in controls is a socialist. Surely that philosophy has long been outmoded. If members of the Opposition wish to carry the argument to extremes, I shall quote to them no less an authority than the late Mr. E. G. Theodore, a former Treasurer in a Labour government, who stated that the extreme of socialism - and I believe that honorable members opposite are at the extreme of socialism - is communism. I do not want to label members of the Opposition with that tag and put them in the category of the Communists, but that is the natural corollary of the suggestion of the honorable member for Melbourne that we on this side of the chamber are socialists because we believe in the imposition of some form of control from time to time.

We must have stricter control of imports. The Government’s present approach to the matter is wrong, because the restrictions are imposed according to the classes of goods. I admit that goods have money value. The present basis establishes a system of priority by allowing traders to bring in a greater percentage of the quantities formerly imported of some categories of goods than of others. That is not the right approach to the question. .Such funds as are available for imports should be made available to those whose business is the importing of goods into this country. If we think in terms of which goods are essential and which are not, inevitably, as has happened during the past few years, we shall put out of business some of the people who import goods that are not regarded as essential. Neither this Parliament nor any other should take it upon itself to put those people out of business. Imports should be controlled on a money basis according to the available funds and not according to the classes of goods considered essential and those considered not essential. Doubtless, the position of the person who has just opened a new business will be mentioned. We must keep in hand enough of our available spending resources for the assistance of persons who have just opened new businesses. Importing, under import restrictions, should not be the sole prerogative of those who have been long established in the importing business.

I disagree with the Treasurer also on another point. He stated, at page 14 of the printed copy of his speech, that expenditure on capital equipment should be discouraged to some degree. Perhaps the Treasurer did not tell us everything that he had in the back of his mind when he made that statement. If he means that we should discourage the importation into Australia of new plant which requires fewer operatives and produces more than does the existing equipment, his policy is very dangerous. That is the type of plant that should be imported into Australia if we are to solve our economic problems, particularly at this time when there are available many more jobs than there are men to fill them. Of course, I am aware that there is an alternative to import restrictions. Before I state it, I wish to say that I do not believe it could be implemented at present. The alternative is the freeing of our exchange rate with sterling. Unfortunately, far too many people will not completely understand what freeing of the exchange rate means. At present our rate of exchange with sterling is 25 per cent. We must endeavour to achieve a balance between our exports and our imports by allowing the banking system to adjust the exchange from time to time. Such adjustments have been made in that manner in the past. Many years ago, under a free-exchange system, the exchange rate fluctuated by no more than 5 per cent. We have now stabilized it at 25 per cent. If we adopted the free-exchange system at the present time, the unbalance between exports and imports would force the exchange rate up to between 35 per cent, and 50 per cent. Exports and imports must be balanced at the time the exchange is freed. If this were done, the value of our exports, which are principally primary products, would improve, and probably the flow of imports would be reduced because the prices of imported commodities would increase.

I have little time left for the second problem - that of inflation. None of us needed the Treasurer to tell us that inflation is developing within our community. We have all felt its effects in recent years, and I believe that none of us wants a recurrence of it. I go further and state that every one in Australia, having experienced inflation, would agree to drastic action to avoid it in the future. I have asked myself what the budget does to solve the problem of inflation, and I ask all honorable members to put that question to themselves. I remind them of the comments that I made early in my speech. Let us remember that the increase in real revenue under this budget is estimated at £49,000,000. If we find that the surplus transferred at the end of the year in fact draws off spending power from the community, however much we and the public dislike it, it is a good antidote to inflation. But this budget will not have that effect.

We find that expenditure will rise by no less a sum than £S1,000,000, including capital works. Of that £S1,000,000, £32,000,000 represents increased payments of social services benefits. Every member of the Parliament, and I believe every member of the community also, will commend the Government for its proposals in relation to increased pensions. The difference between £32,000,000 and £81,000,000 is £49,000,000, which is equal to our increased revenue, so that in point of fact our increased expenditure is greater than our increased revenue for this year. There are three items in the budget which almost cover this amount. They are: Defence services, £12,500,000, payments to the States £21,000,000, and capital works £8,000,000.

I wonder why it is necessary for increased defence expenditure this year. In the last two years, we have voted a total of £400,000,000, but in those years we spent £178,000,000 in one year and £177,000,000 in the other. I cannot see any justification for an increase of £12,000,000 in this particular year. I believe that we should save that amount and put it aside, so that it will be money not spent. Do not let us forget that the expenditure of that additional money will make further demands on the materials and man-power resources of the community. As I have said, the increase in payments to the States is £21,000,000. which represents a total payment of £220,000,000 this year. That is 21.4 per cent, of our total revenue. It is an increase of £21,000,000 on last year. 1 have said on so many occasions that it does not really need repeating, that the States are wasteful in their expenditure of moneys which are provided by the Commonwealth. They are worse, if anything, than this Government is at the present time, and I believe it is the responsibility of all governments in Australia to set an example to the rest of the community in avoiding what the Treasurer has indicated is an inflationary development at the present time.

In relation to capital works, last year we spent only £96,000,000 of the £107,000,000 voted for that purpose. This year, we have put it up to £104.000,000, an increase of £8,000,000. I believe that, at this particular stage of the journey, we need not spend this additional £8,000,000 on public works, for what could be more inflationary in the community than public works expenditure, most of which is non-productive in its nature and which makes a serious demand on labour and materials in short supply? I would go further and say that, rather than spend £96,000,000, we should cut it down even to £90,000,000 and save a total of £14,000,000 on that item in the budget. I have not much time in which to deal with this question of using our surplus for the purpose of State works, but I mention it because 1 believe it is a very wrong principle and one which we have followed too often, to subsidize from the revenue which this Government receives, money which is raised from the public by loans for the purpose of public works.

This budget does little, if anything, to overcome our greatest and most pressing economic difficulties. The blame does not lie with the Treasurer but with the whole Cabinet, and it is unfortunate that there could not have been introduced into the budget move realism and an indication of a desire to accept a much greater degree of responsibility in relation to Australia’s two urgent economic problems.


– No amount of juggling with figures by the honorable member for Petrie (Mr. Hulme) can disguise the fact that this is a budget which will make the rich richer and the poor poorer. It is a budget which will make the wealthy companies even more wealthy. .It will do nothing at all to alleviate the position of the wheat-farmer, the poultry-farmer and those engaged in the dried fruits industry. Worst of all, it will do nothing really to alleviate the position of that section of the community which most needs help at this stage, namely the pensioners. I do not know whether honorable members appreciate that nearly 500,000 people to-day rely on pensions for subsistence. There are in this country approximately 480,000 pensioners, who are to be given, in a record budget which has recorded record profits, and which has announced a record national income, the paltry sum of 10s. a week.

Not very long ago I had the honour to introduce to the Minister for Social Services (Mr. McMahon) a deputation, in Adelaide, representing the age pensioners of South Australia. I asked the Minister if he would tell me whether or not the increase - if an increase were to be granted - would be made retrospective to the date on which the High Court judges received their £50 a week increase, which was the 1st January of this year. It was only then that we discovered that the Minister, who was sitting there listening to our pleas on behalf of the pensioners, had already made up his mind what the decision was to be, because he told us there and then that Cabinet had made up its mind, before it heard the deputation, what the increase was to be, and that neither the question of the increase nor the date of its operation could be affected by anything we said.

How can this Government conscientiously go to the people and say that it believes that another 10s. a week will be sufficient to enable the pensioners to live as human beings ought to live? If the Government is going to allow the pensioners to be paid off with a mere 10s. a week, and if the governments of the States which are controlled by the Liberal party of Australia, such as Victoria and South Australia, go ahead with their plan to unpeg rents in those States, then the landlords in South Australia and Victoria will get the whole of the 10s. a week that the Government proposes to give to the pensioners by way of increased pension. That will certainly be the case with pensioners who have to pay rent.

I told the Minister for Social Services on the occasion of that deputation that an increase of 10s. a week would be totally inadequate because of the fact that many pensioners were paying in rent an amount which, if increased by the 2o per cent, as proposed by the Liberal Government of South Australia would, in most cases, be at least 10s. a week. I informed the Minister that it would be necessary to have a rise of 21s. a week at least, in order to bring the pension of to-day up to its 1948 percentage of the basic wage, when the pension was fixed by the Chifley Government at £2 2s. 6d. At that time, the basic wage for the six capital cities was only £5 15s. a week - and that was an unpegged basic wage. That is important, because the pegged basic wage of to-day bears no resemblance, in purchasing power, to the unpegged basic wage of 1948. The unpegged basic wage of to-day, for the six capital cities, averages £12 6s. a week. The figures for the respective States are : New South Wales, £12 10s.; Victoria, £12 Is.; Queensland, £11 7s.; South Australia, £12 2s.; Western Australia, £13 5s.; and Tasmania, £12 lis. Those are authentic figures put out by the Commonwealth Statistician as being the unpegged basic wage, in accordance with the index figures at the present time. These figures average, as I have said, £12 6s. a week. Let us examine the public’s estimate of the amount that pensioners ought to receive. Surely the Government should pay some attention to the opinion of the public on such an important matter as this. During a recent gallup poll, it was shown that the Australian public is prepared to give married pensioners £5 7s. 6d. each a week and single pensioners not less than £6 Ss. 6d. a week. It is important that there be some distinction between a married pensioner and the unfortunate one who has lost his partner in life and has to continue the rest of life’s journey on his own, because such people are really suffering a genuine hardship when they have to try to pay house rent and meet various other expenses out of a single pension of £4 a week. The Government must not be allowed to thwart the will of the people in this regard by giving to pensioners an amount which is inadequate to enable them to enjoy a decent standard of living.

In 1948, the pension represented 37 per cent, of the unpegged basic wage, having been fixed at that figure by the Chifley Labour Government. It has now fallen to 2S per cent, of the unpegged basic wage for the six capital cities, without taking the proposed increase into consideration, so that instead of its being £4 lis. a week, as it would have been had the Chifley Government remained in office and done no more than merely maintain its 1948 relationship to the basic wage, the pension rate is to be increased to a miserable £4. Even £4 lis. is too little to meet the costs involved in maintaining life having regard to the present spiralling inflation. Labour clearly indicated, by a vote in this chamber twelve months ago, that it believed that the pension should have been increased to £4 a week at that time, and that a proper inquiry should be held to ascertain the absolute minimum amount necessary to meet the requirements of pensioners, both married and single. If pensioners care to examine the Hansard record, they will see that every single member of the Liberal and Australian Country parties who was in the chamber when that vote was taken, voted against the motion to increase the pension moved by the Leader of the Opposition (Dr. Evatt), and every Labour member voted for it.

Dietetically speaking, pensioners have an unanswerable case for a substantially greater increase than that which is proposed. I shall cite figures from a weekly budget prepared by the Old Age Pensioners Association of South Australia to show what its members regard as the minimum amount of food they can live on for a week. I should like the members of the public to note carefully the items which are regarded as a minimum, and I challenge anybody in Australia to say that one single item in this budget is excessive. My only criticism of it is that it is impossible for a person to live on it, but nevertheless it is the budget which the pensioners themselves have presented as a minimum. It provides for Ss. 6d. a week for meat, lb. of butter, 1 lb. biscuits, Is. worth of cheese, lb. of tea, Is. 3d. worth of onions and potatoes, 2 lb. of sugar, and 2s. worth of vegetables. Incidentally, when I was in Sydney five weeks ago, cauliflowers were priced at 12s. 6d. each. However, they have set aside only 2s. a week for vegetables, and 2s. a week for fruit. The other items comprise 3£ pints of milk, one and a half loaves of bread, three eggs, and a total of 7s. 6d. a week for currants, flour, jam, honey, sauce, custard, matches, and soap. The cost of all those items of food alone amounts to £1 17s. 1/d. a week. To that must be added, according to this very modest budget, 4s. 5d. a week for 1 cwt. of wood, 4s. for gas, 3s. for electricity, £1 2s. 6d. for rent- and many of them are paying £2 or more - and 2s. 8d. a week for newspapers, because surely they are entitled to read. All those items total £3 13s. 8d. If we add the price of 2 oz. of tobacco and cigarette papers - and no one will say that that is extravagant - the total is £3 18s. 6d. Now let us consider all those items we have not included and see what they amount to. The amount set aside in the basic wage regimen to cover the cost of footwear and clothing for one male member of the family unit is 12.29 per cent, of the basic wage, which is £1 10s. a week. The corresponding amount set aside for a woman is 14 per cent, of the basic wage, so that the cost of maintaining clothing and footwear would be very much more than 30s. in the case of a woman pensioner. Household drapery, including blankets and bed linen, is regarded as representing 2.31 per cent., and household utensils .68 per cent, of the basic wage. “We have not taken account of fares or amusement, or do we believe that a pensioner has no right to go to a picture show? Do we believe that pensioners have no rights to any amusement whatever? If we do, we shall delete the item, but I am not prepared to delete it. According to this budget, they are not entitled to anything for medical treatment. I do not want any member of the Government parties to say that medical treatment is free, because it is not. I know of innumerable instances where pensioners have had to meet the cost of surgical treatment, which is not covered at all by the social services legislation. All that the pensioner has is the right to have a doctor call at his home, and if he needs surgical or optical treatment, or attention of that kind, he has to meet the cost out of the pension.

Mr Ward:

– And he has to call between certain hours.


– I rise to order. I know that the honorable member for East Sydney (Mr. Ward) is very eager to coach the honorable member for Hindmarsh, but he offends by interjecting from a place other than his proper seat.

Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

– All interjections are out of order.


– You, Mr. Temporary Chairman, will agree with me, even if the rest of your colleagues do not, when I say that the figures I have cited constitute convincing proof that the full needs of pensioners cannot possibly be met on £4 a week. We know that they cannot live on £4 a week. The only question to be decided is whether we can afford to give the pensioners justice, because an increase of the pension to £4 lis. a week, which the Chifley Government would have provided even had it only maintained the 1948 relationship of the pension to the basic wage, could have been met from this year’s surplus of £70,000,000, without costing the community one penny extra in taxation, and we would still have had a balance of £40,000,000 unspent. I do not want honorable members opposite to say now that we have no surplus of £70,000,000 because it is still in existence. The fact is that it has been salted away in various trust funds and it is beside the point to say the Government has used revenue that should have been set aside for the purpose of paying decent pension rates in order to meet the cost of State works programmes. The budget presented by the Government disclosed a surplus of £70,000,000, which should have been earmarked to provide for pensioners a decent standard of living before any of it was set aside for other purposes.

I am surprised that the Government has made no additional provision for the burial costs of pensioners. At present, upon the death of a pensioner, his dependants receive the magnificent funeral benefit of £10 to meet burial expenses. The result is that unless other people are prepared to see that deceased pensioners have decent burials, they have to be buried as paupers, although they have spent the best years of their lives in helping to make this country what it is to-day. This Government should not be able to hold its head erect for one moment longer unless it is prepared to increase the amount set aside for the burial expenses of pensioners. Something should have been done to provide homes for pensioners, and convalescent homes for those persons who are not able to look after themselves. It should not have been left to the charity of the people of Adelaide to provide hot meals for pensioners who are bedridden in their homes. But for the charity of people in Adelaide, and the efforts of Miss Doris Taylor, secretary of the Pensioners League at Norwood, who has established a Meals-on- Wheels organization by public subscription, thousands of pensioners who are now getting a few hot meals a week would be without a hot meal at all.

There is another complaint which must be levelled against the Government. In the first place, it had no right to put the social services contribution component of the income tax into general revenue. If this Government had continued with the plan which the Chifley Labour Government laid down, and had paid Social services contributions into the special trust account as originally intended in order to cover social services payments, there would now be a trust fund so large that there would not be any excuse for the Government to refrain from giving justice to the pensioners, and other persons in the community who have to rely on social services. Although the social services trust account had been in operation only a few years when the Chifley Government went out of office, no less a fund than £187,000,000 had been built up as credit for a rainy day. This Government dissipated the whole of the £187,000,000 to finance other government expenditure. It took what it required from the trust account and put back into it no more than the cost of the pensions. That is dishonest financing. The social services contribution should not be used to meet other government expenditure, such as preparations lor war and the expensive trips abroad upon which Ministers are embarking continually.

For the first time in my memory, we had fourteen ministers in the Parliament to-day. They were all here only because the Minister for Supply (Mr. Beale) arrived back last night from a jaunt overseas, but I am prepared to guarantee that by this time next week, three or four of the fourteen ministers who were in their places to-day will have left for another trip overseas at the taxpayers’ expense. This, while the Government tells the community that it cannot afford justice to the pensioners. If we can spend £200,000,000 every year on war preparations, especially in the coming year when international tension will have eased so considerably as a result of the Big Four meeting in Geneva - if we can afford £200,000,000 to kill people, surely we could spend a quarter of that amount to keep the pensioners alive. That is all the Opposition asks. Surely, in a Christian community, that is not asking too much.

I turn my attention now to the wealthy monopolies that are doing so well under the present Government. General Motors-Holden’s Limited made a gross profit this year of about £15,000,000. The organization’s net profit was nearly £10,000,000. Its original outlay was £2,300,000. The rest of its £37,000,000 capital was extracted from the hapless community, which has been forced to buy the products of General Motors-Holden’s Limited at prices fixed by the company. “While that company and others are making record profits, undreamt of previously, nobody has a right to claim that there should be a further reduction of company tax. It is true that there has not been any reduction of company tax yet, but General Motors-Holden’s Limited has not got over the enormous handout it received last year.

The sooner the next general election is held, the better. I hope that it is held before the end of this year so thai, the 480,000 pensioners who have been denied justice will have an opportunity of registering their disapproval of the Government’s actions. While the bis monopolies are making such huge profits, the Government has no right to say that it cannot afford justice to the pensioners. The gross profits made by General Motors-Holden’s Limited in the past financial year are sufficient to pay to every one of the 480,000 pensioners in Australia an increase of 13s. a week in the pension for twelve months. Just imagine it! That is what could be done with the profits of only one company.

If the Government will not agree to help the pensioners, it must be forced at the next general election to give way to an administration that will take from the greedy and give to the needy. We must not allow the Government to deny justice to the pensioners who pioneered Australia and transformed it into the richest country on earth. The Government should not be allowed to get away with the story that it cannot afford justice to the pensioners. For more than 50 years, the pensioners have paid in toil and heavy taxes, both direct and indirect, for all they are seeking. They are asking for only a small portion of what they have given to the community in 50 years of working life. They do not ask for charity, but for their rights, and that is what they should get. No Australian govenment, whether Liberal or Labour, should ever forget that many of the pensioners who have their rights but are relying, in effect, upon our charity, are men who fought in World War I. to defend Australia. A few of them still living actually fought in the Boer War as well. We should not forget that the pensioners of to-day are the grandfathers and grandmothers of fighting men who, only ten years ago, saved this country from Japanese invasion.

The public has been stirred by the plight of the pensioners. All sections of the community, both Liberal and Labour, are demanding justice for the pensioners, and are not prepared to accept the miserable increase of 10s. a week which the Government has offered to the pensioners in this, budget. This is not a party political question. The plight of the pensioners and the rates of pension should not be brought within the realm of party politics. This question should not be a political football at every general election. There should be a plan, such as that advocated by the Australian Labour party, for a proper inquiry to evolve a formula under which pensioners would receive automatic adjustments to their pensions according to the cost of living, regardless of the political colour of the government in office.

When the pensioners’ deputation met the Minister for Social Services (Mr. McMahon) in Adelaide, I told him that the pensioners were now organized on a federal basis. They have the support of the trade union movement of Australia. The Australian Workers Union and other unions in South Australia have joined in supporting the claim of the pensioners for a just and reasonable standard of living. There is every reason why the trade union movement should support the pensioners. The pensioners of to-day were the trade unionists of yesterday The trade unionists of to-day - and they should not forget it - will be the pensioners of to-morrow. Therefore, the trade union movement throughout Australia has a vital interest in justice for the pensioners. Every man and woman whose father or mother is a pensioner should join the great and growing army that is fighting for social justice for these grand men and women. There are 480,000 pensioners, who, next to the trade union movement, constitute the greatest single political or electoral force in the community to-day. In my opinion, they will be a sufficiently powerful political bloc at the next general election to destroy this Government, unless it changes its mind on the question of pensions. When these 480,000 pensioners are supported by their families - and they ought to be supported by their families - and when they are supported also by the 3,000,000 trade unionists in Australia, they will be able to make their demand for justice irresistible.

Every pensioner in Australia, I believe, should at once join the nearest branch of his pensioners’ association. If the pensioners organize, they will be in a position to compel this Government, or any other government, to give them justice. They should always remember the great trade union slogan that alone they can agitate, but organized they can compel. They can compel this Government to change its ways. If only they will organize themselves into the great and powerful bloc that they can be if they combine with their children and the great trade union movement, they can throw out of office a government which, for five years, ha3 whittled away the value of the pension as established in 1948 by the Chifley Government.

This state of affairs must not be allowed to continue. We can stop it, and we will stop it. I repeat that the people are stirred by the plight of the pensioners, and will not tolerate it any longer. The pensioners should resolve that the united force of 480,000 pensioners and their families together with the 3,000,000 trade unionists of this country will demand that in this land of full and plenty, no pensioner shall, in future, go hungry or be denied the ordinary necessaries and comforts of life. That should not be so in a wealthy country like Australia.

It is all very well for members of the Liberal party and members of the Australian Country party to smile. There is a smile on the face of every Liberal party member. It is all very well for those people to sit here and to smile and grin superciliously, as though the pensioners did not count. At the next election, those honorable members will know whether the pensioners count. They will know whether the sons and daughters of the pensioners count. If the pensioners and their sons and daughters could see the smiles and the supercilious grins on the faces of honorable members opposite tonight, the Government parties would not get the support from those people which they must have received at the last general election, because they could not have won the election without their support. The Government has had its day. It has had five years in which to show that it is prepared to help the pensioners, but it has failed them.

Finally. I say that the pensioners should resolve that every politician who turns a deaf ear to their just demands shall be thrown out of office and that another man shall be put in his place. There is a simple test that every pensioner and every son and daughter of a pensioner can apply. It is to obtain from the official records of the Parliament the division list which will show how honorable members vote on the proposal of the Labour party to increase pensions when the matter arises in a few weeks’ time. The people of Australia will be able to see how every member of the Liberal party and every member of the Australian Country party votes on that issue. They will be able to judge the utterances of honorable members opposite outside the Parliament in the light of their votes inside the Parliament.


.- We have just heard a rabble-rouser drag the plight of the pensioners into this debate with the greatest show of hypocrisy that it has been my misfortune to witness.


– I could have used similar terms, but they are unparliamentary. I ask that they be withdrawn.


– Order ! The remark must be withdrawn.


– I withdraw it. I say that every word that was uttered by the honorable member for Hindmarsh (Mr. Clyde Cameron) to-night, supposedly out of sympathy for the pensioners, was uttered for purely political purposes, as he proved at the conclusion of his speech. He urged the pensioners to organize, to join pensioners’ associations and t( pull along with the great Labour party. He did not use those words, but that was the implication of his remarks. He was using the plight of the pensioners as a political football, but at the same time he was asking other honorable members not to do so.

What is the real view of the pensioners ? Consider the job that the Leader of the Opposition (Dr. Evatt) did before the general election in 1954. How did the pensioners reply to him then? They rejected his party. They have known for a long while, and it has been proved to them on every occasion when this Government has brought down a budget, that they can expect far better treatment from a government composed of the Liberal party and the Australian Country party than from a Labour government.

Honorable members opposite always have their tongues in their cheeks when they speak of the pensioners. Let us cast our minds back to the 1930’s, when there was real want, not only amongst the pensioners, but also amongst hundreds of thousands of other people throughout Australia, owing to a depression brought about by a fall of the prices paid for our products overseas. What kind of a government was it that reduced pensions then? It was a Labour government. Some of the men who supported that government are sitting on the Opposition benches now. But I hope to prove later in my speech that the Labour party which they supported then was very different from the Labour party of to-day.

The honorable member for Hindmarsh referred repeatedly to the relationship between pensions and the basic wage in 1948. He thought that was a very cunning and shrewd move. He implied that he was not using the plight of the pensioners for political purposes, but was displaying real sympathy for them. Somebody outside the Parliament wrote his speech for him. We can see that from the theme. He could not resist a suggestion of the socialization of industry when he dealt with General MotorsHolden’s Limited. However, I am getting away from the point that I want to make. He used figures relating to 1948. What was the glorious exhibition given by the Labour party in 1949, the very peak of the golden age, as it was called by the leader of the party in those days? What did the pensioners get then?


– Nothing.


– That is the answer. The Labour party of those days did not give the pensioners one penny piece extra.

Mr Ward:

Mr. Ward interjecting,


– The honorable member for East Sydney (Mr. Ward) interjects. We are dealing with the budget to-night. He was a Minister in a government that refused to accept a war widow as a responsible person to whom to make a loan so that she could put a roof over her head. He is a person who drags up Stuff in this chamber about “ the Brisbane line “ and other matters. The belief of the people in the sincerity of the Labour party can be tested at an election. The members of the Opposition can have an election at any time they like. I assure them that we on this side of the chamber would not be scared of the result, f do not intend to dwell on the remarks of the honorable member for Hindmarsh, because, not only the members of this chamber, but also the people throughout Australia, with the exception of a certain section in Hindmarsh, know his real value and worth. I shall not waste any more rime on him. 1 am reminded of a remark made by the honorable member for New England (Mr. Drummond) to-day. He referred to a statement by Sir Herbert Gepp that the Australian worker could do anything required of him if he were led properly. I want to relate that statement to honorable gentlemen opposite. When the Leader of the Opposition spoke on this budget, he wanted the people to believe that, not only were the pensioners starving, as was claimed by the honorable member for Hindmarsh, but also that wage and salary earners throughout this country were going short of suitable foodstuffs.

Dr Evatt:

– I claimed that consumption was declining.


– The Leader of the Opposition referred to certain foodstuffs. He used what he described as a report on foodstuffs and the consumption of foodstuffs. He said -

Taking 1938-39 as the base year, the index for 1951-52 was 96, dropping in the next year to 94, and in 1954-55 it was 95.

He went on to say -

Now, since productivity in industry has been substantially increased, on the Treasurer’s own statement and also on the facts, we are entitled to look for some increased consumption.

Let us see w7hat that report stated. I took the opportunity to read it. The report gives some of the reasons for the falls, but the right honorable gentleman would have us believe that wage and salary earners were receiving insufficient income to buy the foodstuffs they require. The report at page 5, reads -

Certain adjustments have been made for unrecorded stock movements in calculating the index numbers for recent years, and the figures for 1953-54 and 1954-55 should be regarded as provisional.

The right honorable gentleman made no mention that those were provisional figures only. The report continues -

The index numbers of food available for consumption per head have been about 3 per cent, lower in the four years ending 1954-55 than in the preceding four years. While there has been a decrease in the quantity of food available for consumption per head it is possible that this may have been offset in part at least by reduced wastage before ultimate consumption within the home. Factors conducing to this are more efficient distribution methods (e.g. refrigerated transport and air freight of perishable commodities) and the large increase in household refrigeration.

The report goes on to say -

In addition there has possibly been increased home production of vegetables, fruit and eggs.

Mr Ward:

– The honorable member is making a mess of his speech.


– I am dealing with something that I hope will make the honorable member for East Sydney feel ashamed of himself as he was the other day following his questions about “the Brisbane line “. Whilst that covers only a general statement on foodstuffs, the right honorable gentleman the other night took the matter a little further and dealt with the consumption of nutrients per head per day. He said -

But consumption of nutrients per head per day - and this is the basic and the only scientific way of testing it - demonstrates a decrease which, if allowed to persist, must threaten the health of the nation as well as threaten the primary industries.

Let us have a look at page 13 of this report, which is obviously the page from which the right honorable gentleman obtained his information. We see that before he gave the actual figures he failed to read a statement in the report explaining some of the details of the tables from which he obtained his information. On page 13, the report says -

The basis for the calculations in this section of the bulletin have been changed since the last issue. The figures are now based on conversion factors calculated from the Table of Composition of Australian Foods, (Anita Osmond and Winifred Wilson, Canberra, 1954) and comparisons with years prior to 1952-53 (which has been revised on this basis) are not, therefore entirely valid.


– What is the honorable member trying to prove?


– The honorable gentleman will soon find out. The Leader of the Opposition went on to say -

Those figures show that from 1951-52 to 1053-54 there was a constant daily decrease in the consumption per head of proteins, calcium - taking the average consumption of each person - iron, vitamins A, B1 and B2.

Then the right honorable gentleman quoted the exact foodstuffs. He mentioned wheat products, sugar, milk products, eggs, butter and green vegetables. Let us have a look at the actual figures contained in the table.

Mr Ward:

– What table is that?


– We find that the information that the right honorable gentleman gave to the House the other night was a total and complete misrepresentation of the facts.

Dr Evatt:

– The information I gave was correct; it had been checked.


– It was a total misrepresentation of the facts. I intend to quote from the document that the right honorable gentleman used the other night. We find that the consumption of sugar increased from 40S,000 tons in 1946-47-194S-49 to 442,600 tons in the present year. The last figure, of course, is only provisional. In 1951-52 the consumption was 447,600 tons and in 1952-53 it was 424,000 tons. In the latter year production was low generally throughout Australia because of seasonal conditions. Last year 442,600 tons of refined sugar were consumed, but as yet that is only a provisional figure.

Let us have a look at the position in regard to milk products. In 1946-47 to 194S-49, 233,000,000 gallons of whole milk were consumed; in 1951-52, 240,000,000 gallons; in 1952-53 242,000,000 gallons and in 1953-54 the provisional estimate was 245,000,000 gallons. The consumption of condensed milk has gone up from 25,600 tons in the years 1946-47 to 1948-49 to 33,000 tons in 1953-54. For powdered milk, the increase is from 12,900 tons to 13,200 tons.

Mr Ward:

– What was the rainfall?


– The honorable member for East Sydney does not like this, but I am placing the facts on record to prove to the people of Australia that they cannot take the word of the right honorable gentleman from Barton. He deliberately set out to mislead this committee and the people in respect of the wages and salaries they receive and the amount of foodstuffs they can buy.


– I rise to order. 1 desire to know, Mr. Temporary Chairman, whether you intend to adhere to the standing order, enforced by Mr. Speaker, that an honorable member aggravates the offence of interjecting when he interjects from another honorable member’s seat. Last night, when I was speaking, the honorable member for East Sydney constantly interjected from the seat he is occupying at the moment, which is not his seat.

The TEMPORARY CHAIRMAN.The honorable member for East Sydney is out of order in interjecting, and he it grossly out of order in interjecting when he is not occupying Ids own seat.


– We find that the consumption of cheese increased from 19.000 tons in 1946-47 to 1948-49 to 26.100 tons in 1953-54. Eggs are the only commodity mentioned in this table of which there was a reduction in consumption.

Dr Evatt:

– That is not the point. The consumption per head is what matters.


– The consumption per head is shown in this table; and the right honorable gentleman can see that

I have the wood on. him in this respect. He got somebody out in the corridor to hunt up information for him, and he used it without checking it. He may dispense with the services of another secretary in the very near future. The consumption of butter increased from 54,700 tons in 1946-47 to 194S-49 to 122,200 tons in 1953-54. The consumption of green vegetables and margarine has gone up also. The right honorable gentleman questioned me about the consumption per head. Let us have a look at Table 11 in the publication that he used and see whether I am not quoting the figures correctly. And he can have the figures for his animal protein, vegetable protein, total protein, carbohydrates, calcium, iron, vitamin A, ascorbic acid and the rest. He went through all of them deliberately with the idea of painting a picture to lead the people to believe that the policy of this Government was such that wages and salaries were not sufficient to buy requisite foodstuffs. He has done the same kind of thing right throughout his political career, not only in respect of this side of politics but also in respect of his own party. The right honorable gentleman would mislead one at every turn if he could get away with it. As I have demonstrated, these figures show an increase of consumption of all these commodities. I could read additional figures if honorable members desire me to do so. I shall be only too delighted to do so at some future date, but if any honorable member cares to look them up he can find them in this report. If, after all this, the right honorable gentleman requires more calcium and iron, I can assure him that the figure for the consumption of calcium increased from 757 mg. in 1952-53 to 778 mg. in 19.13-54. The figure for 1953-54 ‘is only provisional. In the case of iron the increase is from 14 mg. to 14.2 mg. That is the daily consumption per head. T wanted to deal with those few figures only because I thought that somebody had better tackle this position in view of the horrible and frightening picture that the right honorable member for Barton, the Leader of the Opposition, endeavoured to paint here on Tuesday night when he criticized the budget. Even his own newspaper, or one that supports the Labour party, very seriously first described the budget as a “ tight-rope “ budget.


– Which newspaper?


– A newspaper friendly to the honorable member for Melbourne (Mr. Calwell) - the Melbourne Argus. But the next day that journal under the heading, “ Second Thoughts “, admitted that the budget was quite a good budget. In fact, I read in a clipping from that newspaper that the Honorable John Cain, a former Premier of Victoria, had some fine comments to make about it. He is reported to have stated -

It’s a very orthodox budget, tinged with some unfortunate arrogance. . . .

He did not roundly condemn the budget.


– Yes, he did.

The TEMPOS ARY CHAIRMAN. - Order ! Interjections are out of order.


– I am mentioning these matters in order to prove the accuracy of what I said at the outset when I referred to the remark made by the honorable member for New England (Mr. Drummond) this afternoon. Because the Leader of the Opposition has adopted these tactics throughout the whole of his political career, we find that to-day the Labour party, which in 1949 and during the depression, greatly distressed the pensioners, first by reducing their pensions, and then refusing to give them anything, is now a different Labour party. The Melbourne Tier aid of the 9th July, in a feature, “ Labour Speaks “, published an article, contributed by J. V. Stout, who, I am certain, is a very great supporter of the Leader of the Opposition, under the heading, “Party has entered a new era ‘’, which reads as follows : -

Our Future in Society.

Having so very recently started from scratch in our organisation we are now to regard the past for what it was and to see the future for what we hope it will he. To do as we have been directed means the exercise of vigilance to keep our party clean and free of the elements that have disrupted it.

It is a party operating for a party purpose to serve the organised workers. We mean to see it will be such a party. It should have no other purpose. Having chosen the hard way, the true way, we must make our own roads and shape our own material heaven.

Those who will be attracted by our efforts will no doubt .become party to our democracy. Those who may wish to enter the party to serve some other purpose will find their efforts futile. The true faith in Labor is the only faith for Labor.

Let us move away from Stout and Melbourne, and see what is happening now in this party. The Seamen’s Union of Australia is now making application to rejoin the Australian Labour party because it has been publicly stated that the party has entered a new era and is coming back to the lines advocated by the seamen. The secretary of the Fremantle branch of the Seamen’s Union of Australia, Mr. Heard, is reported to have stated yesterday that that branch would press for the repeal of the Australian Labour party rule to the effect that a Communist official cannot affiliate with the party. In spite of the remarks of the honorable member for Hindmarsh (Mr. Clyde Cameron), I contend that if this party is again changing in character, as has been claimed by Mr. Stout, it will have as its members only persons of a certain type, and therefore it will be a sectional party. In those circumstances, the pensioners cannot look forward to receiving very many benefits from the Labour party if that party should ever regain office.

I wish now to deal with a statement by the Treasurer (Sir Arthur Fadden) in his budget speech in respect of hire purchase, about which the Leader of the Opposition took the right honorable gentleman to task. He would have us believe that this Government is opposed to the ordinary family man buying any family requisites on an extended payment plan. If ever there was a vicious system operating in this country, it is the hire purchase system. It must not be confused with the time payment system. Under the latter, if a purchaser does not meet his commitment by paying an instalment on the due date, the article may be repossessed, but the owner may sue only for the unpaid balance of money or instalments. Under the hire purchase system the article may be repossessed even if the hirer has paid 99 per cent, of the purchase price. I am happy to say that years ago “Western

Australia led the field in this connexion by introducing legislation compelling the owner, on repossession, to have the article valued, and the hirer’s equity to be refunded to him if the article was sold. Of course, that is stating the matter in general terms. I agree with the Treasurer that some restriction should be imposed in respect of the hire purchase system, because owners are charging hirers interest at rates varying from 20 per cent, to 30 per cent. These matters should be tackled by the State governments, most of whom are Labour governments, under whose laws most of the companies engaged in hire purchase business are registered. I support the Treasurer’s idea of curbing hire purchase activities, not because I am opposed to the ordinary man or woman obtaining goods on extended terms, but because I should like to see the extended payment system limited to time payment as distinct from hire purchase. Firms such as Industrial Acceptance Corporation Limited and Customs Credit Corporation Limited insert expensive advertisements in the daily newspapers offering very lavish inducements to people to invest their money in those corporations. I have spoken to members of several State legislatures who are themselves putting money into these corporations and who are advising other people to do likewise. The State governments are permitting money to be channelled into these corporations, and at the same time they are complaining that they receive insufficient financial assistance from the Commonwealth and need more and more money in order to carry out developmental projects. The Commonwealth should refuse to underwrite loans for State developmental projects and make up the leeway from taxation revenue if the loan market does not yield the required amount, for so long as the various State governments allow organizations like Customs Credit Corporation Limited and Industrial Acceptance Corporation Limited to drag in money at high rates of interest, to the detriment of loan raisings by the Commonwealth. I know that this matter has been mentioned several times at conferences of Commonwealth and State Ministers, and that it is primarily one for the

State governments to handle, because the hire purchase people are registered under the various State company laws.

The Leader of the Opposition also criticized this Government for expending money on defence. He said -

Again, I think the present international situation not only permits but actually demands a very substantial reduction in the defence expenditure of this country.

He criticized this Government’s proposal to send troops to Malaya, despite the answer of the Minister for External Affairs (Mr. Casey) to a question by the honorable member for Yarra (Mr. Keon) earlier that day, and despite what my colleague from the Mallee (Mr. Turnbull’ had said on the subject. The action of the right honorable Leader of the Opposition in advocating and even demanding at this juncture a substantial reduction in defence expenditure, proves only too conclusively the consistent attitude of the Labour party in respect to defence. Before the last war, various Labour members said in this chamber that they would not spend 3d. on defence. When compulsory training and national service were introduced, the Deputy Leader of the Opposition (Mr. Calwell) said that those schemes would smash the economy of this country. That honorable member is responsible for delaying the introduction of national service training for nine months. It was only when the executive outside - and the honorable member for Swan (Mr. Webb) was one of the unholy twelve - told the Labour party what to do that it agreed to the introduction of national service training.

Australia has seen troublous times. National leaders throughout the world said, a few years ago, that if the democracies could make themselves strong in defence, another war would possibly be averted for several years. We have reached that objective by making ourselves strong, but now that the tension appears to have been eased a little, for which we should be thankful, the Leader of the Opposition wants to smash the defences of this country, and is demanding a substantial reduction of defence expenditure. I do not agree with him, and I hope that the majority of honorable members will take the same view, because Australia still has some distance to go to make its defences sufficiently strongThat is particularly the case in Western Australia. Only recently the head of the Navy, Vice-Admiral Dowling, visited Perth and pointed out that Western Australia was of strategic importance. 1 quote from a report that appeared in the West Australian on the 26th July last -

The Australian Navy had accepted as a fact the increased strategic importance of Western Australia, the chief of the Naval staff (ViceAdmiral Dowling) said in Perth yesterday.

Many men in similar positions realize the need for better defence, and I hope that the Government will make a move to establish a naval base on the western seaboard. I have repeatedly raised this matter in this House since I was elected in 1.946. I well recall the Henderson Naval Report of 40 years ago, which recommended that a naval establishment should be built at Cockburn Sound, but it has never been done. The Commonwealth owns 600 acres of land not far from Cockburn Sound where, years ago, it was hoped that stone could be obtained for building purposes, but not even a commencement has been made. I do not care whether the naval establishment is built at Cockburn Sound or Albany or any other place on the Western Australian coast so long as it is built somewhere. It is criminal neglect that 4,250 miles of coastline should be without a naval establishment. Yesterday, I asked the Minister for Air (Mr. Townley) when the reconnaisance bomber squadron that had been removed from Western Australia would be replaced. Western Australia is without any air defence, even though naval and military forces are mobile.

The TEMPORARY CHAIRMAN.Order! The honorable member has exhausted his time.


.- The honorable member for Canning (Mr. Hamilton) began his speech by reading a long list of figures. No honorable member could follow them, and I doubt whether they would be intelligible to the public.

Dr Evatt:

– The honorable member for Canning did not deal with the proper figures.


– The honorable member was confused as to where he was going, and his speech was a clear demonstration of the old maxim that every circus must have its clown. The honorable member said that certain unions in Western Australia were seeking admission to the Australian Labour party, and he sought to implicate me in the matter. He said that one of those unions was the Seamen’s Union of Australia and he mentioned also another, both of which have Communist officials. While I was president of the Australian Labour party in Western Australia a rule was added to the party’s rules that no union would be allowed to affiliate with the Australian Labour party if it had Communist officials. Consequently, if a union with Communist officials applies for affiliation it will know what treatment to expect. The honorable member for Canning need have no fears on that ground. I certainly have none.

However, I do not wish to deal with the small fry in this debate, but with the shark who is responsible for the introduction of this budget. The Treasurer (Sir Arthur Fadden)


– Order ! The honorable member used an unparliamentary expression which he must withdraw.


– I withdraw the expression, Mr. Deputy Chairman. I am pleased that you directed my attention to it. The Treasurer made a rather unusual excursion into economic affairs. He said that total employment had increased to record heights, national income had gone up by 5 per cent, on the previous year, the output of goods had improved and the spending on consumer goods and services was 9 per cent, higher. He spoke as if those factors were extraordinarily important points in favour of the Government. In my opinion, they are not important. With an advancing economy, one would expect production to increase each year, and with a rapidly growing population it would be serious if employment did not expand, if our national income did not increase and production did not reach a higher level than the year before.

One would naturally expect the expenditure on consumer goods to be greater from a larger population, particularly in view of existing high prices and inflated costs. That does not mean, of course, that the consumers are any better off. Sufficient evidence has been produced from this side of the House to show that the consumers are much worse off than they were the year before. Their standard of living has deteriorated. One need only refer .to the plight of the pensioners, to the worker on the pegged basic wage and to any employee on a fixed income to prove that. One needs only to look at the lowered value of social service benefits to appreciate how the consumer has suffered in recent years. But every one has not suffered under this Government. Profits have increased many times faster than wages, and dividends and share values have reached record levels, as the Treasurer pointed out. These increases in profits are in line with the policy of the Government. Irrespective of the name by which anti-Labour governments have been known, their policy has been to grease the fatted pig and forget the little pigs. That fact has been emphasized in an article that I found in the Parliamentary Library to-day headed “Politics and Inflation”. It is not the kind of article one would find in a journal that is favorable to the present Government. It appeared in Dobson’s Investment Digest of the 11th August, 1955. It is critical of the present Government. In regard to the profit? recently made by General MotorsHolden’s Limited, the writer says -

Political difficulties in the battle again.;t inflation will also follow from the announcement or huge profits by General MotorsHolden’s Limited. The rapid rise of this company to a position of immense wealth and power in Australia is obviously a matter for national congratulation but there are grounds for fearing that the company may be doing almost too well in the profits that it is making.

The latest net profits were £9,900,000, representing 5<>0 per cent, on the issued ordinary capital. The company paid a dividend of 200 per cent, to the American parent organization. General ‘Motors-Holden’s Limited ha? transmitted to the United States in dollar? during the last two years amounts that are greater than the total General Motors investments in Australia for a far longer period. Further expansion is to be financed from accumulated profits.

It is extremely significant that the Financial Editor of the Sun-Herald in Sydney has commented very adversely on the dollar drain imposed by General Motors-Holden”s Limited on Australia. He has also drawn attention to what appears to be a very high rate of profit on the sale of Holden cars, utilities and spare parts. While giving full credit to the company for having founded a new industry in Australia, and while recognizing the immense national importance of the industry, he has sounded a note of warning - in the name of ‘ the instinct of the common man : “ “ . . a continuance of this annual dollar drain by General Motors without a commensurate input (the dividend withdrawal is being jacked up from 3,S.)0,000 dollars last year to 10,000,000 in 1955) ‘night compel many Australians ti> conclude reluctantly that in the interests of their own country it would be better to abstain as far as possible from contributing to the business and the profits of an organization with these propensities.” It is with the reactions of the common man that this article is concerned. Last year there was a minor public outcry at the enormous profits earned by General Motors-Holden’s Limited. This year the criticisms are likely to be stronger, more persistent and directly related to the problem of the dollar shortage.

More important then anything else, there will be political difficulties in the battle against inflation. Senator Ashley, for example, ha* already complained that profits are virtually unlimited while cost-of-living increases in wage” are virtually frozen:

Incidentally, that statement is not contradicted by the journal. The article continues - “ It is no wonder that the workers of Australia. whether they be trade unionists or housewives, become discon.tented over uncontrolled price inflation ind frozen cost-of-living adjustments while profits soar.” The senator strongly attached what he called the “ Government’s failure to synchronize huge profits and dividends rising from 100 per cent, to 200 per cent, with pegged wages and constantly rising living costs “.

It may be assumed that plenty of other people will be thinking with Senator Ashley on this point. There is mounting restiveness with the whole arbitration system, especially in New South Wales. The General Motors.Holden’s Limited rate of profit is likely to simulate opposition to sound anti-inflationary policies.

The next paragraph, which is very important, is headed “Keeping Down Prices is Everybody’s Task “. It reads -

The general prosperity of most Australians is so apparent that there is unwillingness in this country to admit the seriousness of some if our economic dangers. Memories of the rapid inflation of 1951 and 1052 are already crowing lamentably dim. Costs continue to creep upwards and every rise in prices add.force to the constant plea for higher incomes, or lower taxes. No one section of the community likes to feel that its members alone are showing restraint and feeling the pinch while others compete with one another in trying to ride on the crest of the wave.

Unless these attitudes are corrected fairly quickly, there is a danger of a rude shock to Australian complacency. We are a high-cost country able to enjoy a favoured standard of living because of the excellence of a few basic industries and the natural wealth of our country. But the rest of the world does not owe us a living, still less a living at the rather generous standards that most Australians regard as their birthright.

Perhaps the time has come when governments and industries alike should look at the inflationary problem from the standpoint of the man in the street. Keeping prices down is everybody’s business. We have to depend on the instinct of the common man and cannot expect him to see why he should show restraint when around him there are conspicuous proofs of bulging surpluses and immense profits.

That is a very important article, which should be noted by the supporters of the Government. The heading of the last paragraph in particular, which states that keeping down prices is everybody’s business, is very important. Keeping down prices is not just the business of the basic-wage worker, the pensioner, or of the man with a margin that is not as valuable as it was earlier : It is the business of everybody, and that includes big business and the Government. The policy of looking after the big fellow and letting the little man “ stew in his own juice “ is always followed by supporters of the Government.

The party that sits opposite fooled the people some time ago when it altered its name to the Liberal party. It did that because of its inglorious record during the depression years and in the early years of World War II. Although it fooled the people temporarily, there was no change of its policy. Its action simply meant that, as the Communists do now and again, it was going underground for the time being and that it would come out with exactly the same policy when the time was opportune. That party i3 now attacking the standards of the people in a different way. It is implementing a long-term policy that was formulated before it assumed office as a government. It renewed its attacks on the workers’ standards in 1948 when the Chifley Labour Government was in office. At that time we had a more stable economy than any other country, but, due to no fault of the then Government, the question of prices control had to be referred to the people. It will be remembered that prices control was lapsing because the national security regulations had lapsed. It was necessary to hold a referendum to ascertain whether the Commonwealth could retain control over prices. Honorable members opposite and the people who support them went out into the highways and byways and told the members of the community that they should vote “ No “. They claimed that the States could control prices just as effectively.

Dr Evatt:

– And that prices would fall.


– And that prices would fall, as the Leader of the Opposition (Dr. Evatt) has stated. That is what they said, but they knew in their own minds that they were deliberately deceiving the people and that, if prices control passed to the States, it would ultimately collapse. That is actually what occurred, and what they intended to occur. They wanted prices control to be unsatisfactory and inefficient, because they were eager to restore profits to big business, which they represent in this chamber. That was their aim, and they achieved it.

I now wish to cite some figures which clearly indicate that the policy of this Government has brought about the unfortunate set of circumstances in which the Australian economy now finds itself. [ refer to the World Economic Report 1952-53 issued by the United Nations, which contains an economic survey of West European countries, Australia, Canada and the United States of America. The report shows that from 1950 to 1953, in Belgium the cost of living rose by 10 per cent., in Canada by 12 per cent., in Denmark by 13 per cent., in France by 29 per cent., in West Germany by 8 per cent., in Italy by 17 per cent., in The Netherlands by 12 per cent., in Norway by 29 per cent., in Sweden by 26 per cent., in the United Kingdom by 23 per cent., and in the United States of America by 11 per cent., giving an average, excluding Australia, of 15.6 per cent.

The report further shows that, over the same period, the cost of living in Australia rose by 48 per cent.

Dr Evatt:

– The rise in Australia was the highest of all.


– Yes, the highest of all. The Treasurer stated in his budget speech that in the six-year period from 1948-49 to 1954-55 the cost of living in Australia rose by 75 per cent. I now direct the attention of honorable members to an address by the Chairman of Lombard Investments (Australia) Limited made as recently as the 15 August, 1955, in which he said -

Figures recently published by the Acting Commonwealth Statistician showed that, since 1051, the cost of living in Australia had risen by 38.3 per cent., implying that, in terms of purchasing power, the 1951 f A.] is now worth only approximately 13s.

This is the Government that was pledged to put value back into the £1 in 1949. This is the Government that was critical of the Chifley £1. I bet that the people would prefer the Chifley £1 to-day to the Fadden flimsies that they are getting in their pay envelopes. I wonder whether there could be any greater condemnation of a government that has deliberately sold out the Australian people in the interests of big business. No wonder the Treasurer has been referred to in the newspapers as “ our lamentable and tragic Treasurer “. He painted a very doleful picture of Australia’s future. During the course of his budget speech, he said -

As a nation in the world economy we advance or fall behind according to the degree of our competitive power. Let us therefore pause to note a highly significant fact - during recent times, when our level of costs has started to rise again, costs and prices in many of the major countries abroad have been stable and in some cases they have even been tending to fall.

He did not add that it was the policy of this Government that was responsible for our bad position in respect of competing with other countries. It is no wonder that other countries display a lack of faith in Australia.

The Treasurer also mentioned that the borrowing programme of £133,500,000 had been approved by the Australian Loan Council. He expressed the opinion that there might be some difficulties in raising this money. He said -

This amount was regarded as being about sufficient, but no more than sufficient, to finance the carrying on of State works and housing programmes at approximately the level of the previous year.

Then he mentioned the difficulty of raising money, and he doubted whether the loan would be raised. If the States cannot proceed with their public works because loan money is not available, we may have unemployment. That seems to me to be the natural outcome of the view which the Treasurer expressed in his budget speech. I agree with the statement of the Treasurer that Australia will have difficulty in borrowing overseas. As a matter of fact, overseas borrowing will be drastically limited because of the lack of faith of other countries in Australia. An article published in the Statist, of the 5th November, 1954, under the heading “ Should Australia Borrow More ? “, reads as follows : -

One consideration that may have made the Australian authorities reluctant to come to the London market for the substantial sterling loan that would contribute in such major degree to a solution of their payments problem is the possibility that the operation would not be successful. It has, indeed, to be recognized that Australia has acquired a reputation for economic instability since the end of the war that might make investors in this country a little less enthusiastic about an Australian offer than they showed themselves to be about the recent offer in London of a New Zealand Government stock. And particularly, perhaps, at the present time in view of the fact that there has in recent months been a very substantial decline in Australia’s external reserves.

The article added, in effect, “ But have a go, anyhow. You might be fortunate enough to get funds from overseas “.

The Treasurer stated that he was opposed to controls. Apparently, he considers that the economy can drift on in the way that it is without any controls.

Dr Evatt:

– He does not mind controls of labour.


– I notice that. He also does not mind when the Commonwealth Arbitration Court pegs the basic wage, so long as profits are not pegged. There is a move to restore prices control in the majority of the States. Price controls are operating in Queensland, New South Wales and South Australia, which has a

Liberal government. Legislation is about to be introduced in the Western Australian Parliament for the re-introduction of prices control. As I have pointed out, prices control, when conducted by the States, is never so effective as when it is operated by the Commonwealth. It cannot be expected that a job will be done as -well by six separate States as it would be done by one unified control. iSo I think that it would be in the interests of the nation if the Government were prepared to defy its masters, the people who paid the Government to oppose prices control previously, and took steps to introduce Commonwealth prices control. That is the only way to stop the inflationary trend in our economy. There would be nothing wrong with the Government’s admitting that it has made a mistake by not implementing prices control in 1948 and since. There would be nothing wrong with the Government’s accepting the viewpoint of the Australian Labour party in this matter. The Treasure] need not be like Saint Anthony the hermit, who refused to do right simply because the devil told him to do it.

Nobody with any sense would want controls for controls’ sake. During the war, many controls had to be introduced in the interests of a total war effort. They were abolished as soon as practicable. Many of them were terminated by the Labour Government, and many others were abolished by this Government - some of them too quickly for Australia’s economic stability. For instance, capital issues control was abolished by this Government when it came to office, but that control had to be re-introduced. The Government should give further consideration to the implementation of unified control of prices throughout the Commonwealth. As has been pointed out already, although the Treasurer has expressed opposition to controls of any sort, he is certainly not opposed to control by the Commonwealth Arbitration Court of the workers’ basic wage. The Government should take immediate steps to consult the States with a view to obtaining from them the power to re-introduce Commonwealth prices control. Failing that, a referendum should be held for this purpose. There is no doubt about what the view of the people would be in such a matter. The people have been squeezed out since the law of supply and demand has been allowed to operate. The butter subsidy has been removed, and the price of that commodity has risen in recent weeks by 4d. per lb. This simply means that persons in the lower income brackets eat less butter than before. That does not help the dairy industry. If the price of butter were reduced, people would consume more, and the dairy industry would be assisted in that way.

I do not say that, because we have gone back to a free economy, the law of supply and demand operates freely. That is never the case. In various ways, sellers have influenced prices. For instance, by the use of trade marks and trade brands, they have kept the price of certain articles pegged at a level which would be much lower if the law of supply and demand operated simply. As a matter of fact, in a recent report the Monopolies and Restrictive Practices Commission appointed by the House of Commons to inquire into certain practices that were in operation in the United Kingdom, indicated that that did occur in a so-called free economy. A newspaper report of its findings reads -

It said that a wide range of industries and trades were operating private agreements which “ affect the public interest adversely “. One of the methods criticized by the report was the power of trade associations to dictate to individual traders agreed prices at which goods must be sold.

Such agreements place in the hands of associations a power over individual traders which we regard as excessive and dangerous.

Rigid price maintenance applied to a substantial proportion of goods in any trade virtually eliminates price competition between retailers and is likely to lead to the waste of economic resources.

So it is not simply a question of whether there is price control. It is also a question of who controls prices, whether it be the Government or private sellers themselves. Only to-day I read in the West Australian that the Government of Western Australia had had to order the price of bread to be reduced by 1/2 d a loaf, because the bread manufacturers’ association had kept the price above the proper level. There is an instance of a monopoly in action. I believe that costs could also be brought down by a reduction of sales tax and pay-roll tax which inflate them.

It is suggested by financial experts, and I have no doubt that it is true, that the pay-roll tax adds 4 per cent, to industrial costs. Sales tax on many articles amounts to 16 per cent, which, of course, reacts on the prices of those articles. Sales tax should be removed at least from furniture and household goods. Those two taxes inflate costs because they are passed on to the consumer in the prices of commodities. I suggest that they should be reviewed, and that if additional taxation is needed it should be derived from the other end of the scale, that is, from the very high profits being made in industry at present. The Government, in formulating its taxation proposals, should have given consideration to people in the lower ranges of income. The wage-earner is not getting more in actual purchasing value as a result of the increase of wages that has occurred since this Government has come into office, because the increase is eaten up by the galloping cost of living. In fact, the man on the basic wage in particular, finds himself drifting gradually up to a higher income range, which means that the taxes levied on him are increased. Wage increases are more than offset by increases in the cost of living. During the Chifley Government’s term of office the man on the basic wage paid about 16s. a year in direct’ tax. Under this Government the basic wageearner is paying more than £12 a year in direct tax. The Government is not doing anything to help such people; it is concerned with looking after the interests of big business and forgets the ordinary wage-earner. The budget stands condemned because it offers no hope to ordinary people who are suffering because of present economic circumstances, and the Government stands condemned for being so complacent about the social injustices that exist in this country to-day. We, as the Labour party, make no apology for opposing this budget, and because we believe it to be wrong in principle we believe that it should be reviewed.


– Order! The honorable gentleman’s time has expired.

Progress reported.

page 347


The following answers to questions were circulated: -

Canberra Rentals

Air. J. R. Eraser asked the Minister for the Interior, upon notice -

  1. . What was the total amount being received by the Department of the Interior from rentals of government-owned dwellings in Canberra prior to the rental adjustment effective on the 7th July last?
  2. What is the total amount of rentals now received?
  3. What were the amounts received by the Department of the Interior in each of the last five years from the maintenance element of rentals?
  4. What has been the actual cost to the department for the maintenance of governmentowned dwellings in each of those years?
  5. Has the deduction of 20 per cent, from the capital cost of a dwelling before the assesment of rental been continued under the rental adjustment scheme?
  6. Does this 20 per cent, deduction eliminate the added cost of construction in Canberra?
  1. £21,571 3s. 8d. per fortnight including charges for land rent and rates.
  2. £22,376 10s. 4d. per fortnight including charges for land rent and rates.
  3. It is not possible to estimate these amounts as the rents of approximately 800 houses are on’ a flat Tate and not based on the rent formula. Also others are rebated rents under the rental rebate scheme.
  4. 1953-54, £96,095. 1954-55, £118,285.

Figures for earlier years not available.

  1. Yes.
  2. The rebate of 20 per cent, in capital cost which has been effective since 1948 was made to cover abnormal costs associated with building in Canberra, particularly payment of country allowance and overtime. Except in isolated instances, country allowance is not now paid in Canberra and overtime has been reduced. The 20 per cent, rebate is more than sufficient to cover these factors.

Telephone Services

  1. Why has Alderman E. Norman, Mayor of Auburn, living at 211 Park-road, Auburn, New South Wales, been denied a telephone service for nearly two years?
  2. If it is because of major cable work and re-arrangement of existing cables, why is it that Mr. A. E. Fernside, living at 137 Parkroad, Auburn, had a telephone service con nected on or about the 15th August, 1955, for which an application was lodged approx mately two months ago?
  3. On what date did cable pairs become available to provide the service for Mr. Fernside?
  4. When the cable became available, why was service not provided for the Mayor by whom it is so urgently needed?
  1. Unfortunately it has not been possible to provide the service due to the absence of a vacant circuit in the underground cable serving this area. A major cable work and re-arrangement is now in progress.
  2. A spare circuit became available in the underground cable serving that address.
  3. 25th May, 1955.
  4. Because 211 Park-road, Auburn, is in the area served by a different cable and it was not technically practicable to use the cable pair concerned.

Victimization of Department of Works Employee

Will he make available the files dealing with the case of Mr. A. T. Miller, an employee of his department who was the subject of victimization by Communist union officials?

House adjourned at 10.45 p.m.

Cite as: Australia, House of Representatives, Debates, 1 September 1955, viewed 22 October 2017, <>.